Market News

SEOUL, Sept 2 (Reuters) — South Korean foreign-exchange authorities bought about $20 billion in U.S. dollars sold by SK Hynix following the chipmaker’s $26.5 billion American depositary receipt (ADR) listing in July, according to a source with direct knowledge of the matter.

Foreign Exchange Stabilization Fund Made Purchases

The Foreign Exchange Stabilization Fund, managed by South Korea’s finance ministry and the Bank of Korea (BOK), purchased the dollars through over-the-counter transactions as SK Hynix repatriated its U.S. fundraising proceeds to South Korea.

The source declined to be identified because of the sensitivity of the matter.

Although markets had widely expected SK Hynix to repatriate the dollars raised on Wall Street, Reuters said this was the first report identifying the ultimate buyer of the bulk of those funds.

SK Hynix, the finance ministry and the BOK declined to comment.

Supporting the Won While Rebuilding Dollar Holdings

The transactions differ from the types of foreign-exchange intervention historically conducted by South Korean authorities.

The purchases potentially served two objectives: limiting volatility in the foreign-exchange market as SK Hynix converted its dollar proceeds, while also replenishing the authorities’ depleted foreign-currency reserves.

South Korea does not officially disclose the precise asset composition or current size of the Foreign Exchange Stabilization Fund, which consists exclusively of U.S. dollars and Korean won.

Market participants and economists have speculated that the fund’s dollar holdings have fallen substantially in recent months following aggressive and persistent intervention by the central bank to support the won.

Won Rebounds Sharply

The South Korean won has staged a significant recovery after being among Asia’s worst-performing currencies in 2025.

The USD/KRW exchange rate had been around 1,550 in late June, near a 17-year extreme, before the won recovered by more than 12% over the following two months.

The SK Hynix transaction therefore provided authorities with an unusually large source of dollars at a time when rebuilding dollar holdings had become increasingly important.

SK Hynix Raised $26.5 Billion

SK Hynix’s July share sale was the largest U.S. offering by a foreign issuer.

The memory-chip manufacturer said it intended to use the proceeds to finance new factories and equipment as it expands production to meet surging demand for chips used in artificial intelligence.

Foreign Exchange Stabilization Fund

The Foreign Exchange Stabilization Fund stood at 135.1 trillion won ($98.7 billion) under an operational plan approved by South Korea’s National Assembly last year.

Under the government’s latest budget proposal, unveiled on Tuesday, the fund is projected at approximately 106.5 trillion won.