South Korea’s foreign-currency deposits posted a record decline in March as the won’s sustained weakness drove companies to shift their dollar and other foreign holdings back into local currency. The outflow marks a significant shift in corporate behavior after months of currency volatility.

The won has struggled against the dollar amid broader dollar strength and concerns about the Korean economy’s export-dependent recovery. Companies holding foreign-currency deposits faced mounting losses as the exchange rate moved against them, prompting the conversion wave that drove the record deposit decline.

For Korean businesses, the deposit shift reflects a tactical response to currency risk rather than a fundamental change in foreign exchange needs. Exporters particularly benefit from converting dollar revenue when the won weakens, as it translates to more local currency for domestic operations and expenses. The withdrawal signals how deeply currency expectations have shifted corporate treasury strategies.