SK Hynix’s $26.5 billion IPO fuels demand for the Korean won, as regulatory measures encourage export companies to convert foreign currency, creating a chain effect

(1) SK Hynix raised 26.5 billion USD through a US listing, and its continued sale of US dollars drove a sharp rebound in the Korean won, providing fresh momentum for Korean regulators to encourage export companies to repatriate overseas funds. At last week's working meeting, the Vice Minister of Finance called on exporters to step up the conversion of overseas revenues and to repatriate funds stranded abroad.(2) The large-scale settlement of foreign exchange by Hynix proves that a single company can influence the trend of the foreign exchange market, strengthening regulators' determination to continuously cooperate with leading exporters to jointly stabilize the exchange rate—the core logic being that voluntary foreign exchange settlement by enterprises is more effective than costly official direct intervention.(3) According to an economist at Seoul Meritz Securities, Hynix's US dollar selling has triggered a chain reaction: in addition to foreign exchange settlements for raising funds through ADR, the continued strengthening of the Korean won has encouraged other companies that had delayed currency conversion to follow suit. Despite foreign investors selling stocks, the Korean won rebounded about 6% against the US dollar in July, making it Asia's best performing currency during the month and reversing its status as the region's worst performing currency in the first half of the year.