South Korea’s won transitioned from one of Asia’s worst performers to one of the world’s best last month. The currency appreciated nearly 8 per cent against the dollar in July, becoming the world’s second-best performer after the Colombian peso. This turnaround was driven by the repatriation of chipmakers’ earnings, a tech sell-off, and tighter monetary policy.

Investor bets that domestic expansion plans would trigger sustained repatriation of overseas dollar earnings played a major role. Samsung Electronics and SK Hynix unveiled plans to invest more than $1tn across several years to build AI infrastructure and semiconductor factories. Traders estimated about $1bn a day was being repatriated between mid-July and mid-August.

Additionally, the Bank of Korea raised interest rates for the first time in more than three years, increasing its benchmark rate to 2.75 per cent. This hawkish stance comes as GDP growth reached 3.7 per cent in the second quarter. Analysts suggest that shifts in flow dynamics and government efforts to repatriate funds are supporting the won's rebound.