South Korean FX authorities bought $20 billion in repatriated SK Hynix funds, source says
By Aboki Forex —
South Korean foreign exchange authorities bought about $20 billion in repatriated SK Hynix funds, according to a source with direct knowledge of the matter. The purchases were made through the Foreign Exchange Stabilization Fund as the chipmaker brought its Wall Street fundraising proceeds home.
Authorities behind the purchases
The Foreign Exchange Stabilization Fund, managed by South Korea's finance ministry and the Bank of Korea, bought the dollars as SK Hynix repatriated its U.S. fundraising proceeds to South Korea. The source declined to be identified because of the sensitivity of the matter.
Markets had widely expected SK Hynix to repatriate the dollars raised on Wall Street. This is the first report identifying the ultimate buyer of the bulk of those funds. SK Hynix, the finance ministry and the Bank of Korea declined to comment.
Two possible objectives
The transactions differ from the types of foreign exchange intervention historically conducted by South Korean authorities. The purchases potentially served two objectives: supporting the won while rebuilding dollar holdings.
South Korea does not officially disclose the precise asset composition or current size of the Foreign Exchange Stabilization Fund. Market participants and economists have speculated that the fund's dollar holdings have fallen substantially in recent months following aggressive and persistent intervention by the central bank to support the won.
Won recovery and record share sale
The South Korean won has staged a significant recovery after being among Asia's worst-performing currencies in 2025. The currency had come near a 17-year extreme before recovering. The SK Hynix transaction therefore provided authorities with an unusually large source of dollars at a time when rebuilding dollar holdings had become increasingly important.
SK Hynix raised $26.5 billion in its July share sale. The memory chip manufacturer said it intended to use the proceeds to finance its expansion as it boosts production to meet surging demand for chips used in artificial intelligence.
The Foreign Exchange Stabilization Fund stood at a level set under an operational plan approved by South Korea's National Assembly last year. Under the government's latest budget proposal, unveiled on Tuesday, the fund is projected at approximately that approved level.