[Editor's Pick] Government Issues SOS to Major Exporters: "Please Release Your Dollars"

[Anchor]

Reporter Han, the high exchange rate has been persisting for quite some time now.

[Reporter]

As the exchange rate remains stubbornly high, the government has called in major exporters to request that they release dollars into the market.

Six major exporting conglomerates, including Samsung Electronics and SK Hynix, attended a meeting yesterday (June 11).

What they have in common is that they are representative exporters that earn significant amounts of dollars from selling goods overseas.

The government requested that these companies convert their export proceeds into won immediately upon receipt and bring back funds held overseas to Korea.

If companies release the dollars they hold into the market, the supply of dollars will increase, which can help alleviate the upward pressure on the exchange rate.

You might think that a high exchange rate is beneficial for exporters.

This is because even with the same 100 million dollars in earnings, a higher exchange rate means they receive more money when converted into won.

However, the situation changes when the exchange rate becomes too high.

It drives up the import prices of goods such as crude oil, natural gas, and grain, and increases the cost burden for companies, which can eventually fuel inflation.

During the meeting, the government also expressed concern that if the high exchange rate persists, it could increase the burden on companies and households, and hinder the recovery of people's livelihoods.

The participating companies also stated that increased volatility in the exchange rate makes it difficult to manage foreign exchange risks and heightens management uncertainty, adding that they would cooperate to stabilize the foreign exchange market.

[Anchor]

As of now, there don't seem to be any clear factors that would cause it to fall.

[Reporter]

There are actually more factors pushing the exchange rate up.

The outflow of foreign capital, the burden of high U.S. interest rates, and instability in the Middle East are all propping up the exchange rate.

Recently, foreign investors have been continuously selling off domestic stocks.

Yesterday alone, they sold nearly 1.5 trillion won worth of stocks, marking 24 consecutive trading days of net selling.

When they sell stocks, they convert the won into dollars to take back to their home countries, and this process increases the demand for dollars, which can add to the upward pressure on the exchange rate.

U.S. interest rates are another variable.

With the recent U.S. inflation rate rising to 4.2%, there are forecasts that U.S. interest rates may remain at a high level for the time being.

When interest rates are high, dollar-denominated assets become more attractive, and global capital tends to flock toward the dollar.

Tensions in the Middle East also remain a source of instability.

If the conflict drags on, international oil prices could rise further, and investors may seek safe-haven assets like the dollar instead of risky assets, leading to a stronger dollar.

The market view is that recent movements in the exchange rate are not due to new negative factors, but rather a situation where existing ones remain unresolved and continue to pile up.

Experts believe that exchange rate volatility is likely to continue for the time being, depending on U.S. interest rates and the international political situation.

Reported by Han Ji-yeon | Written by Kim Da-yeon | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.