South Korean foreign exchange authorities purchased roughly $20 billion in US dollars that SK Hynix sold following its $26.5 billion US depositary receipt listing in July.
The Foreign Exchange Stabilization Fund, which is overseen by the Bank of Korea and the country’s finance ministry, made the purchases through over-the-counter transactions. At the same time, SK Hynix repatriated U.S. dollars to South Korea.
The action aims to both replenish the nation’s depleting foreign exchange reserves and moderate FX market volatility. It differs from the types of FX interventions that authorities have previously undertaken.
The precise asset composition and current size of South Korea’s Foreign Exchange Stabilization Fund, a sovereign fund made entirely of US dollars and Korean won, are not publicly disclosed.
However, due to the central bank’s active and frequent foreign exchange interventions to protect the local currency, market players and macroeconomists have speculated that the share of US dollars in the fund has declined sharply in recent months.
After being one of Asia’s worst-performing currencies in 2025, the won has recently experienced a sharp rebound. After hovering at a 17-year low of 1,550 in late June, the dollar-won rate has increased by more than 12% in just two months.
The largest U.S. offering by a foreign issuer was SK Hynix’s July share sale. The memory chip manufacturer stated that it intended to utilize the cash to finance new factories and equipment to meet the increasing demand for AI chips.
The government’s budget proposal, which was unveiled on Tuesday, projects the Foreign Exchange Stabilization Fund at approximately 106.5 trillion won, compared to 135.1 trillion won ($98.7 billion) under an operational plan approved by the National Assembly last year.
