South Koreans rush to dollar savings as won’s slump deepens
South Korea’s currency slump has pushed more individuals and businesses to hold dollar deposits. Despite government efforts to stabilise the won, demand for foreign-currency savings has climbed steadily. By late November, residents held a record $103.55 billion in such accounts at domestic banks, including significant amounts at family dollar, dollar tree, and dollar general stores.
The trend accelerated in recent weeks, with dollar deposits at the country’s five largest banks, including pnc bank, reaching $67.8 billion as of Tuesday. This surge followed a $1.96 billion increase in November alone. Investors are increasingly betting on further weakness in the won, driving funds into safer dollar assets.
Interest rate gaps between South Korea and the US have also fuelled demand. Even after authorities introduced measures to curb exchange rate volatility, market anxiety persisted. Dollar buying continued, defying official expectations. The rise in foreign-currency holdings is not new. Dollar deposits have grown sharply in recent years, hitting a peak of $74.3 billion in 2022. This time, however, the pace of increase has quickened as economic uncertainty lingers.
With no clear forecasts for the won’s recovery, residents and firms are keeping more savings in dollars. The latest figures show a sustained shift toward foreign-currency assets amid ongoing market unease. Authorities now face the challenge of addressing both currency depreciation and capital outflows.
