SK hynix's Dollar Inflow to Hit Foreign Exchange Market Like a Currency Swap
- Input
- 2026-07-12 11:03:59
- Updated
- 2026-07-12 11:03:59
[Financial News] As SK hynix brings in $26.5 billion, or about 40 trillion won, raised through its NASDAQ American Depositary Receipt (ADR) listing in the United States, a large-scale dollar supply is expected to begin flowing into the domestic foreign exchange market. The won–dollar exchange rate is also likely to be affected significantly from late July, when conversion begins in earnest, through September.
According to industry sources on the 12th, SK hynix raised $26.5 billion through the issuance of American Depositary Receipts on the 10th. The proceeds will be paid into the company on the 14th, after which they will be gradually converted into won in line with the investment schedule.
The funds will be used for domestic capital spending, including construction of the Yongin Semiconductor Cluster, the Cheongju P&T7 advanced packaging plant, and the introduction of extreme ultraviolet (EUV) lithography equipment. Because the dollars were raised overseas but will be used for investment in Korea, the foreign exchange market will effectively see a large volume of dollar selling.
SK hynix said it has not yet finalized the scale or timing of the currency conversion. However, market watchers say the company is likely to sell dollars in stages whenever won is needed, in line with the investment plan disclosed in its securities filing.
The size of the dollar inflow is being described in the market as comparable to a currency swap. During the financial market turmoil caused by COVID-19 in 2020, the currency swap agreement between the Bank of Korea and the Federal Reserve System was worth $60 billion, but only about $19.87 billion was actually supplied to the domestic market. SK hynix's fundraising amount is larger at $26.5 billion.
Compared with Korea's trade surplus of about $36.2 billion in June, the fundraising amount is equivalent to about 73 percent of that figure. It is also roughly on par with the Bank of Korea's estimate of the average daily spot won–dollar trading volume in the first quarter of this year, which stood at $33.28 billion, and is nearly twice the roughly $13.6 billion that the foreign exchange authorities sold on a net basis during the same period to stabilize the exchange rate.
The market believes some exchange-rate stabilization effect had already been reflected even before the ADR issuance was finalized. The won–dollar exchange rate, which had risen to around 1,560 won intraday amid forward exchange contract selling, has since fallen back to the 1,400-won range, a move analysts attribute partly to those expectations.
Brokerages expect the actual currency conversion to begin in late July and continue through August and September. A plan to convert about $1 billion a day has also been mentioned, but some of the foreign currency will be needed for overseas payments, including equipment purchases from ASML Holding N.V. (ASML) in the Netherlands, so not all of the funds are expected to be converted into won.
jjw@fnnews.com Jung Ji-woo Reporter