South Korea's FX fund bought $20 billion from SK Hynix in unusual move

South Korea’s Foreign Exchange Stabilization Fund bought about $20 billion in US dollars from SK Hynix’s repatriated proceeds after its $26.5 billion ADR listing in July, using over-the-counter transactions to bolster FX reserves and cushion the won. The move marks a departure from traditional interventions by purchasing directly from SK Hynix rather than selling into the market, with officials declining to comment on the ultimate buyer. Reuters reported that the identified buyer of the bulk of the funds was not previously disclosed. The won’s 2025 weakness has given way to a notable rebound, with the dollar-won rate recovering from a 17-year low around 1,550 in late June and rising more than 12% in two months. SK Hynix said the proceeds would finance new factories and equipment to meet surging AI chip demand, highlighting the scale of the USD fundraising as the largest US offering by a foreign issuer. The Foreign Exchange Stabilization Fund’s exact asset mix remains undisclosed, but the fund size has been cited around 135.1 trillion won (about $99 billion) under an operating plan, with the budget projecting about 106.5 trillion won (around $78 billion).