South Korea's Ministry of Finance and Economy assessed that supply-demand imbalances in the foreign exchange market are being resolved due to large-scale forward exchange sales from major companies. Lee Hyung-ryeol, Director of the International Finance Bureau at the Ministry of Finance and Economy, stated at an inter-agency meeting on illegal foreign exchange transactions held on the 14th that major semiconductor and heavy industry companies have begun releasing large volumes of forward exchange sales into the market, improving forex market supply and demand and easing concentration. The assessment comes as the first-half trade surplus reached a record $138.3 billion, representing a $110.9 billion increase compared to the previous year.
SK Hynix and Hanwha Ocean Execute Forward Exchange Sales
SK Hynix started operating its currency exchange strategy related to American Depositary Receipt (ADR) listing funds. Hanwha Ocean is conducting multi-billion dollar forward exchange sales to increase its currency hedge ratio.
First-Half Trade Surplus Reaches $138.3 Billion
The first-half trade surplus totaled $138.3 billion, an increase of $110.9 billion compared to the previous year. Director Lee stated that structural changes in second-half foreign exchange supply and demand are anticipated based on solid fundamentals including the record-high trade surplus.
Korea Customs Service Prosecutes 84 Illegal Forex Cases
The Korea Customs Service sent 84 cases totaling 2.4 trillion won to the prosecution by the end of May. The agency focused enforcement on crimes that constrict foreign exchange liquidity, including overseas property flight and trade settlements using virtual asset currency exchange. Detected cases included instances where companies failed to collect export proceeds from overseas subsidiaries for extended periods, then converted long-term receivables without filing direct investment reports. The Korea Customs Service will continue expanding investigations into illegal foreign exchange transactions including procedural violations, import-export price manipulation, and money laundering.
National Tax Service Completes Overseas Account Reporting
The National Tax Service completed overseas financial account reporting at the end of June under the system designed to prevent offshore tax evasion. The agency stated it will support foreign exchange management from a tax administration perspective through strict measures including thorough collection and penalty dispositions for overseas account concealment.
Agencies Strengthen Cooperation on Forex Violations
The inter-agency task force on illegal foreign exchange transactions agreed to further strengthen cooperation among relevant agencies to eradicate illegal forex transactions that disrupt the foreign exchange market. The Korea Customs Service will enhance information sharing with the National Tax Service during illegal forex transaction enforcement to enable linkage to offshore tax evasion investigations. The National Tax Service will share overseas financial account reporting status within the task force to track and collect illegal foreign currency funds including tax evasion.
FAQ
What did South Korea's Ministry of Finance say about the forex market on the 14th?
Director Lee Hyung-ryeol of the International Finance Bureau stated at an inter-agency meeting on the 14th that supply-demand imbalances in the foreign exchange market are being resolved as major semiconductor and heavy industry companies release large volumes of forward exchange sales into the market.
How many illegal forex cases did Korea Customs Service prosecute by the end of May?
The Korea Customs Service sent 84 cases totaling 2.4 trillion won to the prosecution by the end of May, focusing on crimes that constrict foreign exchange liquidity including overseas property flight and virtual asset currency exchange in trade settlements.
