South Korean foreign exchange authorities bought roughly $20 billion of U.S. dollars sold by SK Hynix following the chipmaker’s record $26.5 billion American depositary receipt listing in July, using the transaction to replenish foreign-exchange reserves and help stabilize the won, a source with direct knowledge of the matter told Reuters on Wednesday.
The Foreign Exchange Stabilization Fund, jointly managed by the finance ministry and the Bank of Korea, purchased the bulk of the dollars through over-the-counter transactions as SK Hynix repatriated the proceeds to South Korea, according to the source.
The purchases reveal for the first time who ultimately absorbed most of the dollars that SK Hynix brought back to the country after its landmark Wall Street offering. It had been widely expected that the company would repatriate the funds, but the identity of the main buyer had not previously been reported.
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The transactions differ from the more conventional foreign-exchange interventions South Korean authorities have historically used to support the won. Rather than simply selling dollars to defend the currency, the authorities were able to absorb dollars generated by a major corporate capital-raising and add them to the country’s foreign-exchange holdings.
South Korea’s foreign-exchange authorities have faced sustained pressure on their dollar resources following months of intervention aimed at containing weakness in the won.
The government does not publicly disclose the precise asset composition or current size of the Foreign Exchange Stabilization Fund, a sovereign pool consisting of U.S. dollars and Korean won. Market participants and macroeconomists have speculated that the fund’s dollar holdings have fallen sharply in recent months as the central bank repeatedly intervened in the foreign-exchange market.
The latest transactions therefore provide authorities with an unusual opportunity to rebuild dollar liquidity without relying solely on market purchases or other reserve-management operations.
The move also comes as the won has staged a sharp reversal. The South Korean currency was among Asia’s weakest performers in 2025, but has strengthened substantially in recent months. The dollar-won exchange rate, which approached a 17-year high of around 1,550 won per dollar in late June, has since fallen by more than 12%, marking a dramatic recovery for the won.
The authorities’ ability to purchase SK Hynix’s repatriated dollars is expected to also reduce the potential foreign-exchange market impact of such a large corporate conversion. Converting tens of billions of dollars into won in a short period could otherwise generate substantial demand for the local currency and amplify volatility in the exchange rate.
SK Hynix’s July ADR sale was the largest U.S. equity offering by a foreign issuer. The memory-chip maker said it would use the proceeds to fund new factories and equipment as it races to expand production capacity amid surging demand for artificial-intelligence chips.
The company’s fundraising underlines the growing importance of South Korea’s semiconductor industry to the country’s capital flows and foreign-exchange market. Large overseas financing transactions can generate significant dollar inflows, creating both an opportunity and a challenge for policymakers managing the won.
Converting the proceeds into domestic currency provides funds for SK Hynix’s South Korean operations and investment plans. For the authorities, purchasing those dollars allows them to capture part of the resulting foreign-currency inflow and add it to official reserves rather than allowing the entire amount to flow through the commercial FX market.
The scale of the transaction is notable against the size of the stabilization fund. The fund stood at 135.1 trillion won ($98.7 billion) under an operational plan confirmed by the National Assembly last year. Under the government’s budget proposal unveiled Tuesday, however, its projected size is around 106.5 trillion won.
The roughly $20 billion purchase from SK Hynix therefore marks a substantial amount relative to the fund’s overall resources and could provide a meaningful boost to its dollar liquidity.
More broadly, the development indicates that there are changing tools available to South Korean policymakers as they navigate volatile global capital flows, semiconductor investment and pressure on the won. With corporate dollar inflows becoming increasingly significant, authorities can potentially use such transactions to replenish reserves while limiting abrupt movements in the currency market.
The challenge will be balancing reserve accumulation against the need to allow the foreign-exchange market to function normally. As the won’s recent rally demonstrates, market forces can shift rapidly, making the management of both reserve levels and exchange-rate volatility crucial for policymakers.