Why Did Corporate Dollar Deposits Surge in November?
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Synopsis
In November, corporate dollar deposits soared at the fastest rate this year, driven by a strengthening U.S. dollar and increasing foreign market uncertainties. This surge reflects a strategic shift among firms to secure their dollar holdings.
Key Takeaways
- Corporate dollar deposits surged to US$53.7 billion in November.
- Increase of 21 percent from October.
- Individual dollar deposits reached $12.2 billion.
- Market uncertainties drive demand for dollar holdings.
- The South Korean won has depreciated against the U.S. dollar.
Seoul, Nov 30 (NationPress) Dollar deposits by businesses at local banks experienced the most significant increase of the year in November, as companies intensified their strategies to bolster their dollar assets amidst a robust U.S. dollar, according to industry data released on Sunday.
The total outstanding dollar deposits at five leading commercial banks, including KB Kookmin Bank and Shinhan Bank, reached US$53.7 billion as of Thursday, reflecting a 21 percent increase from $44.3 billion just a month prior, as reported by Yonhap news agency.
This surge represents the largest monthly rise observed in 2025. Dollar deposits are financial instruments where won is converted into dollars for deposit, subsequently withdrawn or converted back into won upon maturity.
Generally, when the dollar strengthens, investors tend to cash out their profits, resulting in a decrease in dollar deposit balances.
However, in November, dollar deposits increased despite the strength of the U.S. dollar.
Industry insiders noted that corporations expanded their dollar reserves in response to growing U.S. investments and increasing uncertainties in the foreign exchange market.
“Following the election of U.S. President Donald Trump last December, corporate currency exchange transactions and dollar deposit totals reached unprecedented levels,” an official from a local bank stated. “This month recorded the largest increase so far this year.”
Individual investors have also raised their dollar deposits, which reached $12.2 billion as of Thursday, marking the fourth consecutive monthly growth since August.
The growing interest in overseas stock markets and expectations of a stronger dollar have driven up demand among individual investors.
“In light of the recent fluctuations in the foreign exchange market, there is a noticeable trend, especially among businesses, to increase their holdings in foreign currencies,” remarked another official from a commercial bank.
The South Korean won has significantly depreciated against the U.S. dollar in recent months, despite continuous verbal interventions from authorities, falling from approximately 1,390 won per dollar on September 1 to about 1,470 won on Friday.
Point of View
I view the recent surge in corporate dollar deposits as a clear indicator of market confidence amidst global uncertainties. This trend reflects strategic financial planning by companies to safeguard their assets, which is crucial for economic stability.
NationPress
30/11/2025
Frequently Asked Questions
What is the reason behind the increase in dollar deposits?
Companies are increasing their dollar holdings due to a strengthening U.S. dollar and rising uncertainties in the foreign exchange market.
How much did corporate dollar deposits grow in November?
Corporate dollar deposits rose to US$53.7 billion, marking a 21 percent increase from the previous month.
Are individual investors also increasing their dollar deposits?
Yes, individual investors have raised their dollar deposits to $12.2 billion, reflecting a growing interest in foreign investments.
What has influenced the depreciation of the South Korean won?
The South Korean won has depreciated against the U.S. dollar due to various market factors, including global economic conditions and local monetary policies.
What are the implications of increasing dollar deposits for the economy?
Increasing dollar deposits may indicate a shift towards more secure investments, potentially stabilizing the economy in uncertain times.
