South Korea's Export Payments in US Dollars Account for 83.5%... Impact of Semiconductor Price Decline

[Asia Economy Reporter Kim Eun-byeol] Last year, the proportion of US dollars in export payments received by domestic companies fell by 1.0 percentage point to 83.5% compared to the previous year.

On the 17th, the Bank of Korea announced the '2019 Export and Import Settlement Currency' report, stating that the share of export settlements by currency last year was in the order of US dollar (83.5%), Euro (6.1%), Japanese yen (3.1%), Korean won (2.6%), and Chinese yuan (1.8%), with these five currencies accounting for 97.1% of total exports.

The settlement shares of the Euro, Japanese yen, and Chinese yuan increased by 0.5 percentage points, 0.3 percentage points, and 0.1 percentage points respectively compared to the previous year, while the US dollar and Korean won decreased by 1.0 percentage point and 0.2 percentage points respectively.

The Bank of Korea explained that the decline in the unit price of semiconductor exports, which have a 97.3% dollar settlement share, led to the reduced proportion of dollars in total export payments. The spot price of DRAM semiconductors (8GB standard) dropped by half from an average of $8.11 in 2018 to $3.88 last year.

The Euro settlement share rose from 5.6% in 2018 to 6.1% last year due to increased automobile exports. The yen share increased by 0.4 percentage points to 3.1%.

The Korean won share fell by 0.2 percentage points to 2.6%, related to the re-imposition of sanctions on Iran. Korean companies had been settling payments in won when importing crude oil from Iran since the end of 2010.

In import payment settlements, the US dollar share rose by 0.4 percentage points to 80.6% compared to a year earlier. Both the Euro and yen shares fell by 0.5 percentage points each, recording 5.9% and 5.6% respectively. The won share increased by 0.3 percentage points to 5.9%.

This content was produced with the assistance of AI translation services.