South Korean Won Highest in Over 11 Months

The South Korean won traded at around 1,380 per dollar in late August, reaching its strongest level since September 2025, after the Bank of Korea lifted its benchmark interest rate to 3%. The BOK delivered a second consecutive 25-basis-point hike, reinforcing its tightening stance amid persistent inflation and a stronger-than-expected economic recovery. The move adds to the won's significant rebound from its 17-year low reached in June. Additionally, expectations of increased dollar selling by Samsung Electronics and SK hynix to fund record shareholder returns lent further strength to the currency. Robust semiconductor activity also bolstered the won, with the BOK upgrading its 2026 growth forecast to 3.3% from 2.6% on stronger chip exports, while Nvidia's better-than-expected earnings further eased concerns over the outlook for AI-related semiconductor demand.

The South Korean won rose to 1,380 per dollar, extending gains to its strongest level since September 2025, as a weaker US dollar and strong domestic fundamentals supported the currency. The dollar remained near multi-month lows amid US debt concerns and the Treasury's bond-buyback plans. At the same time, South Korea's exports jumped 56% year-on-year in the first 20 days of August, while semiconductor shipments surged to $26 billion, generating a $14 billion trade surplus and supporting exporters' dollar-selling. Samsung Electronics and SK hynix also unveiled record shareholder-return plans of up to KRW 110 trillion and KRW 40 trillion, respectively, which could encourage foreign-currency conversions into won. Attention also turned to the Bank of Korea’s policy meeting on Thursday, with markets expecting another 25-basis-point hike to 3.00% from July's 2.75%. Meanwhile, geopolitical risks from the Middle East remained a headwind following the US expansion of sanctions against Iran.

The South Korean Won touched 1384.00 against the USD, the highest since September 2025. Over the past 4 weeks, US Dollar South Korean Won lost 6.21%, and in the last 12 months, it increased 0.09%.