Won/dollar falls for sixth day… hits 1,380 won intraday amid shareholder return and 'bet on won appreciation'

The won/dollar exchange rate fell for six consecutive trading days, dropping as low as the 1,380 won level intraday. Expectations of dollar selling due to shareholder return policies by Samsung Electronics and SK Hynix, combined with dollar selling by export companies and foreign investors betting on a stronger won, pushed the rate to its lowest level in 11 months.

On the 21st, the won/dollar exchange rate closed weekly trading at 1,386.5 won, down 6.1 won from the previous day's closing price. Based on the closing price, this is the lowest level in about 11 months since September 17 of last year (1,380.1 won).

The exchange rate opened at 1,395.0 won, up 2.4 won from the previous day, but soon turned downward. Around 11:46 a.m., it fell to 1,380.3 won, marking its lowest intraday level since September 18 of last year when it hit 1,380.0 won. As low-price buying orders flowed in during the afternoon, some of the decline was reversed.

The exchange rate has fallen for six consecutive trading days from the 14th through today. The total drop during this period reached 32.9 won.

Today's decline in the exchange rate was driven by dollar selling from export companies and foreign investors. Analysts suggest that after the 1,400 won level broke, off-market investors began selling dollars in anticipation of further declines, steepening the trend toward a stronger won.

Shareholder return policies by Samsung Electronics and SK Hynix also fueled expectations of dollar selling. It is interpreted that movements to sell dollars ahead of actual conversion demand emerged, as there were predictions that dollars earned overseas could be converted into won for use in dividends or share buybacks.

There are also analyses suggesting that the possibility of an additional increase in the base rate by the Bank of Korea Monetary Policy Board scheduled for the 27th has been partially reflected. The market does not rule out the possibility of a "back-to-back" interest rate hike, following last month's move, as concerns over inflation and financial stability persist.

The global dollar also showed weakness. Around 3:45 p.m., the dollar index, which reflects the value of the dollar against six major currencies, traded at the 98.7 level.

In the market, the 1,400 won level, originally considered a key support line, broke faster than expected, increasing weight on the possibility of further declines in the exchange rate.

Lee Jeong-hoon, an economist at Daishin Securities, said, "As semiconductor companies continue their shareholder return and conversion demand for domestic investment persists, dollar selling dominance is likely to remain for some time." He added, "While the pace of decline may ease due to a sharp short-term drop, there is room for further declines to reach this year's low of 1,350 won."

Kwon Min-soo, who took office today as Deputy Governor of the Bank of Korea, also noted that short-term capital flows had influenced recent exchange rate movements but stated, "From a fundamental perspective, I believe the exchange rate is correctly moving downward."