Decline in Won-Based Export Settlements in 2024: BOK

Synopsis

In 2024, the share of South Korean exports settled in won decreased primarily due to weak auto export growth, according to the Bank of Korea. The dollar remains the dominant currency for export settlements, driven by strong semiconductor sales.

Key Takeaways

Decrease in won-based export settlements in 2024.
Automobile export growth lagged behind overall exports.
U.S. dollar dominance in export settlements increased.
Record high semiconductor exports contributed to trade performance.
Overall exports reached a new annual record in 2024.

Seoul, April 14 (NationPress) The percentage of South Korean exports processed in the local currency saw a decrease in 2024, primarily due to sluggish growth in automobile exports, according to data released by the central bank on Monday.

The utilization of the won represented 2.7 percent of all export settlements last year, marking a drop of 0.2 percentage points compared to the previous year, as reported by the Bank of Korea (BOK) and cited by Yonhap news agency.

This share had increased in 2023 for the first time in six years, but it experienced another decline in 2024. The downturn was mainly linked to the slower growth in car exports, which are generally settled in Korean won. Automobile exports increased by 6 percent last year, which was less than the overall export growth of 8.1 percent, as stated by the BOK.

A reduction in machinery exports also played a role in this decrease.

The U.S. dollar continued to be the leading currency for settling South Korean exports in 2024, making up 84.5 percent of total export settlements, up from 83.1 percent in 2023.

This rise in dollar-based settlements was fueled by strong semiconductor exports, which are predominantly settled in U.S. dollars. Outbound shipments of chips surged by 43.9 percent year-on-year, reaching a record high of US$141.9 billion in 2024.

Meanwhile, the share of the euro in export settlements fell to 6.0 percent in 2024 from 6.8 percent the year before, while the proportion for the Japanese yen dipped by 0.3 percentage points to 2.0 percent.

The Chinese yuan's contribution to total export settlements was 1.5 percent last year, down from 1.7 percent in the previous year, according to the data.

South Korea's total exports grew by 8.2 percent year-on-year in 2024, achieving a new annual record driven by robust semiconductor shipments.

Outbound shipments reached US$683.8 billion last year, surpassing the previous record of US$683.6 billion set in 2022, based on data from the Ministry of Trade, Industry and Energy.

Imports declined by 1.6 percent year-on-year to US$632 billion, leading to a trade surplus of US$51.8 billion. The ministry indicated that outbound shipments of eight out of fifteen major export categories improved in 2024.