Korean Won Export Share Hits All-Time High Last Year: "Increase in Won-Settled Passenger Cars and More"

Bank of Korea Releases “2025 Exports and Imports by Settlement Currency (Final)”

The proportion of exports settled in Korean won reached an all-time high last year based on customs clearance data. This was driven by strong exports settled in won, particularly for passenger cars and semiconductor manufacturing equipment. In contrast, both the export and import shares of the US dollar, the most widely used settlement currency, declined.

Containers are piled up at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News

According to the "2025 Exports and Imports by Settlement Currency (Final)" released by the Bank of Korea on April 16, last year’s export settlement by currency was as follows: US dollar (84.2%), euro (5.9%), Korean won (3.4%), Japanese yen (1.9%), and Chinese yuan (1.3%). These five currencies accounted for 96.7% of total export settlements. The share settled in Korean won rose by 0.8 percentage points from the previous year, reaching a record high, while the shares for the US dollar and Chinese yuan fell by 0.3 percentage points and 0.2 percentage points, respectively.

Park Seonggon, head of the International Balance of Payments Team at the Financial Statistics Department, Economic Statistics Department 1 of the Bank of Korea, analyzed that the record-high proportion of export settlements in Korean won was due to both a decline in the share of US dollar settlements and a significant increase (33.1%) in exports settled in won for items such as passenger cars and semiconductor manufacturing equipment, which traditionally have a higher share of won settlements.

Park further pointed out, “In particular, for passenger cars, although exports to the United States declined last year, total global exports increased. The rise in euro-denominated exports of eco-friendly vehicles to the European Union and the expansion of used car exports to the Commonwealth of Independent States (CIS) were major factors behind the overall growth in passenger car exports. Of these, used car exports reached an all-time high last year, with most of them settled in Korean won, resulting in a 10.5% increase in the share of passenger car exports settled in won.”

Regarding the decrease in the share of US dollar exports, Park explained, "A decline in exports to the US due to tariff impacts, coupled with sluggish performance in chemicals and petroleum products—which have a high proportion of US dollar settlements—resulted in the growth rate of US dollar export settlements (3.4%) falling short of the overall export growth rate (3.8%)." However, he noted that, on a long-term trend, the share of US dollar settlements continues to hover around 80%.

The share of export settlements in Japanese yen fell for the second consecutive year, reaching an all-time low. Park explained, “Weak exports to Japan, particularly in steel products, machinery, and precision equipment, led to a decrease in exports settled in Japanese yen.”

By settlement currency, the import shares were as follows: US dollar (79.3%), Korean won (6.6%), euro (6.0%), Japanese yen (4.0%), and Chinese yuan (3.2%), with these five currencies accounting for 99.1% of total import settlements. The share of US dollar settlements fell by 1.1 percentage points from the previous year, while the shares for the euro, yen, and won each rose by 0.3 percentage points. For the Korean won, the combined share of exports and imports also reached an all-time high.

Meanwhile, the share of imports settled in Chinese yuan increased for the seventh consecutive year, reaching a record high. Park noted, “Rising imports from China, especially in machinery, precision equipment, minerals, and home appliances, contributed to the increase in settlements made in yuan.”

Looking at last year's regional breakdown of settlement currencies for exports and imports, exports and imports with the European Union and Japan saw a relatively high proportion of settlements in the trading partner’s currency, in addition to the US dollar. In contrast, settlements with the United States, China, Southeast Asia, Central and South America, and the Middle East were mostly conducted in US dollars.

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