Won-Dollar Rate Falls 160 Won in Six Weeks, Breaking Below 1,400

Ahead of the August corporate tax prepayment deadline

Exporters unleash heavy dollar selling

The won strengthened past 1,400 per dollar for the first time in 11 months as expectations grew that exporters would step up dollar sales ahead of the August corporate tax prepayment deadline.

In Seoul trading, the won was at 1,397.7 per dollar as of 3:30 p.m. on August 19, 14.1 won stronger than the previous session. That marked the lowest dollar-won level since September 24, 2025, when it stood at 1,397.5 won. The exchange rate broke below 1,400 won for the first time since October 2, 2025, when it was 1,399.5 won. From its intraday high of 1,559.2 won on July 1, the dollar has fallen 161.5 won in about six weeks.

The sharp drop came as exporter dollar selling continued and the market bet that more supply would emerge before the August corporate tax prepayment deadline.

Korea Investment & Securities estimated August interim corporate tax prepayments this year at 46.1 trillion won ($33.2 billion). That would be about 30 trillion won ($21.6 billion) more than the 15.9 trillion won ($11.5 billion) paid in August last year. Companies need to convert dollar holdings into won to pay taxes in local currency.

Expectations that Samsung Electronics Co. and SK Hynix Inc. would soon roll out large-scale shareholder return plans also weighed on the dollar. After daytime trading ended, SK Hynix disclosed a 40 trillion won ($28.8 billion) share buyback plan. The exchange rate later fell into the 1,393 won range.

Park Sang-hyun, an analyst at iM Securities, said the view had spread that chipmakers and other exporters were sitting on a growing stockpile of dollars to sell as the trade surplus widened sharply.

Foreign investors also continued to sell dollars. They were net sellers of more than 3.8 trillion won ($2.7 billion) in the South Korean stock market on August 19, but in the foreign-exchange market they were reported to be selling dollars. A bank foreign-exchange dealer said foreign investors had been selling dollars through custodians since the morning session to settle local stock purchases made two trading days earlier. After the exchange rate fell below 1,405 won, stop-loss dollar selling also emerged, the dealer added.

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

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