The Korean won continued its sharp decline, reaching ₩1,545.2 per U.S. dollar, its lowest point since March 9, 2009. This depreciation is primarily attributed to a massive sell-off of local stocks by foreign investors. On Monday alone, foreign investors offloaded a net ₩7.7 trillion ($4.9 billion) worth of Korean stocks, extending their selling streak to seven consecutive trading sessions.
This trend of foreign investors divesting from Korean equities has been ongoing, with cumulative net sales reaching about ₩70 trillion, extending a 20-session selling streak. The selling pressure has been particularly concentrated in major semiconductor stocks like Samsung Electronics and SK Hynix, with foreign investors selling ₩3.87 trillion of Samsung Electronics and ₩3.3 trillion of SK Hynix on a single day. This constitutes 92.4% of the total foreign net selling on the Kospi. Analysts suggest this is largely profit-taking and portfolio rebalancing, as these stocks had seen significant gains.
Despite the substantial foreign selling, the benchmark Korea Composite Stock Price Index (Kospi) showed a relatively contained decline, falling only 0.2 percent to 8,394.65. The won's depreciation has been exacerbated by expectations of continued U.S. Federal Reserve rate hikes, making the dollar more attractive. Authorities, including Finance Minister Koo Yun-cheol, have expressed concerns over potential speculative trading and have vowed to investigate and take action against market-disruptive activities. The Bank of Korea is also expected to send a strong signal with a potential July rate hike aimed at stabilizing the currency.
The intensity of foreign selling in 2026 has surpassed previous crises, including the IMF foreign-exchange crisis and the COVID-19 sell-offs, with all 20 of the largest single-day foreign net selling figures on the Kospi since 1998 occurring this year. Foreign investors net sold ₩44.71 trillion in May and have already exceeded that in June with ₩44.8 trillion. While Korea's foreign exchange reserves are much stronger than during past crises, totaling $426.99 billion at the end of May, concerns remain about short-term dollar liquidity. Economists like Moon Jung-hiu of KB Kookmin Bank suggest the won could stabilize around ₩1,500 to ₩1,520 if stock market volatility eases, but could even reach ₩1,600 if current trends persist.
