Dollar-Won Rate Slides 160 Won in Six Weeks, Breaks Below 1,400

Ahead of August Corporate Tax Prepayment Deadline

Exporters Unleash Dollar Sales

The South Korean won strengthened past 1,400 per dollar for the first time in 11 months. The move was driven by growing expectations that exporters will step up dollar sales ahead of the August corporate tax prepayment deadline.

As of 3:30 p.m. in Seoul on Aug. 19, the dollar was trading at 1,397.7 won, down 14.1 won from the previous day in the Seoul foreign-exchange market. That marked the lowest level since Sept. 24, 2025, when it stood at 1,397.5 won. The dollar-won rate fell below 1,400 won for the first time since Oct. 2, 2025, when it was at 1,399.5 won. From the intraday high of 1,559.2 won on July 1, the rate has dropped 161.5 won in about six weeks.

The sharp decline on Aug. 19 came as exporters continued to offload dollars and market expectations built for additional dollar supply ahead of the August corporate tax prepayment deadline.

Korea Investment & Securities estimated August interim corporate tax payments this year at 46.1 trillion won ($33.2 billion). That would be about 30 trillion won more than the 15.9 trillion won ($11.5 billion) paid in August last year. Companies must convert dollar holdings into won to pay taxes in local currency.

Expectations for major shareholder return programs from Samsung Electronics Co. and SK Hynix Inc. also supported the won. Shortly after daytime trading ended, SK Hynix disclosed a 40 trillion won ($28.8 billion) share buyback plan. The dollar-won rate then fell to the 1,393 won range.

Park Sang-hyun, an analyst at iM Securities, said the market increasingly sees semiconductor companies accumulating dollars available for sale as the trade surplus surges.

Foreign investors also kept selling dollars. They were net sellers of more than 3.8 trillion won ($2.7 billion) of South Korean stocks on Aug. 19, but were reported to have sold dollars in the foreign-exchange market. One bank foreign-exchange dealer said foreign investors had been selling dollars through custodians since the morning. The flows were tied to settlement for domestic stock purchases made two trading days earlier, with investors selling dollars and buying won. After the exchange rate fell below 1,405 won, stop-loss selling emerged in previously purchased dollar positions, the dealer added.

Moon Da-woon, a research fellow at Korea Investment & Securities, said the dollar-won rate could fall to the 1,350 won range by year-end.

Shim Seong-mi, Korea Economic Daily reporter smshim@hankyung.com