The USD/KRW exchange rate fell below 1,500 won for the first time in three weeks, staying in the late 1,400s range as of May 22, following SK Hynix's $26.5 billion American Depositary Receipt (ADR) listing on Nasdaq on May 10. Market analysts attribute the rate's decline primarily to expectations that the approximately 40 trillion won raised will be gradually converted to Korean won over several months for domestic investment. The exchange rate had peaked at 1,555.8 won on May 2, marking the highest closing level since March 2009 during the global financial crisis, before falling to 1,498.5 won on May 8 and 1,493.0 won on May 14, remaining below 1,500 won through six consecutive trading days.
SK Hynix ADR Listing Drives Exchange Rate Decline
SK Hynix raised approximately $26.5 billion (about 40 trillion won) through its Nasdaq ADR listing on May 10. Oh Jae-young, a researcher at KB Securities, analyzed that expectations of substantial won conversion formed even before the actual capital conversion, causing corporate and investor preemptive dollar buying demand to rapidly decrease. The exchange rate began declining before both the May 10 listing date and the May 14 subscription payment date, reflecting the market's advance pricing of future dollar supply.
The rate dropped to 1,473.4 won on May 21 and traded in the 1,483 won range during intraday trading on May 22, maintaining levels below 1,500 won.
Export Firms and Foreign Investors Add Downward Pressure
Export companies' nego (dollar selling) volume contributed to the rate decline alongside ADR expectations. Currency hedging volume from export and heavy industry firms flowed into the foreign exchange market, tilting supply-demand dynamics toward dollar selling dominance.
Foreign investors' shift to net buying of Korean stocks also strengthened the won. As foreign investors converted dollars to won to purchase domestic stocks, won buying demand increased.
Analysts Forecast 1,470-1,490 Won Short-Term Range
KB Securities forecasts the exchange rate will fluctuate in the 1,470-1,490 won range in the short term. The firm stated that if the rate falls below the 1,480 won level—which has served as a support line multiple times—additional decline to the 1,440-1,450 won range (levels before the US-Iran conflict) is possible. KB Securities suggested the rate could settle in the mid-1,400s by year-end.
Lee Min-hyuk, an economist at KB Kookmin Bank, analyzed that "this year's exchange rate has fallen sharply several times but was blocked near the 200-day moving average each time," adding that "this time, dollar supply conditions have improved, and improvements in terms of trade due to rising semiconductor export prices, plus growth expectations, are being added." Lee stated that "while fluctuations near the 200-day line may continue for the time being, we place weight on the possibility of a downward breakthrough," explaining that "in this case, high exchange rate expectations could break, and the pace of decline could accelerate."
US-Iran Conflict and Oil Prices Pose Key Variables
Park Sang-hyun, a researcher at iM Securities, diagnosed that while dollar supply-demand conditions have improved, the US-Iran conflict and international oil prices could limit further exchange rate declines. Park stated that "in a situation where there are no clear factors to influence dollar flows, whether oil prices rise further depending on whether the Iran war escalates will play the most important variable role," adding that "if the war phase is prolonged due to intensified mutual offensives between the US and Iran, additional oil price increases are inevitable, which could act as pressure for dollar strength."
FAQ
What caused the USD/KRW exchange rate to fall below 1,500 won in May 2026?
The exchange rate fell below 1,500 won primarily due to SK Hynix's $26.5 billion ADR listing on Nasdaq on May 10. Market expectations that this capital would be gradually converted to Korean won, combined with export firms' dollar selling and foreign investors' net buying of Korean stocks, drove the rate down from its May 2 peak of 1,555.8 won to the late 1,400s range by May 22.
What exchange rate range do analysts forecast for the USD/KRW?
KB Securities forecasts a short-term range of 1,470-1,490 won, with possible further decline to 1,440-1,450 won if the rate breaks below the 1,480 won support level. The firm suggested the rate could settle in the mid-1,400s by year-end, though the US-Iran conflict and international oil prices remain key variables that could limit downward movement.
When did the USD/KRW exchange rate reach its recent peak?
The exchange rate reached 1,555.8 won on May 2, marking the highest closing level since March 2009 during the global financial crisis. The rate then fell below 1,500 won on May 8 (reaching 1,498.5 won) and dropped to 1,493.0 won on May 14, remaining in the 1,400s range for six consecutive trading days through May 22.
