South Korea considers using foreign exchange funds to absorb SK Hynix’s American depositary receipts to raise US dollars
The Korea Economic Daily quoted an unnamed investment bank source as saying that South Korea's foreign exchange regulatory authorities are discussing using the foreign exchange stabilization fund to buy the U.S. dollars raised by SK Hynix's issuance of American Depositary Receipts (ADRs) to curb sharp fluctuations in the U.S. dollar exchange rate against the South Korean won. It is reported that SK Hynix plans to use most of the funds raised from this issuance of ADRs for local investment. By then, South Korea’s domestic foreign exchange market will see a large inflow of US dollars. The market speculates that if the foreign exchange management department uses the foreign exchange stabilization fund to purchase U.S. dollars, there is a high probability that the operation will be completed through over-the-counter transactions through banks.