![\"Bank](\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/08\/rcv.NEWS1.NEWS1.20260612.2026-06-12T104835_1007955656_DIPLOMACY_I_P1.jpg\"\/ "\\"August")
Bank of Korea Governor Shin Hyun-song delivers a commemorative address at the ceremony marking the central bank’s 76th anniversary, held at the Bank of Korea in Jung-gu, Seoul, on June 12. Photo courtesy of the Bank of Korea<\/p>\nBank of Korea Governor Shin Hyun-song delivers a commemorative address at the ceremony marking the central bank’s 76th anniversary, held at the Bank of Korea in Jung-gu, Seoul, on June 12. Photo courtesy of the Bank of Korea<\/p>\n
The August interim prepayment of corporate tax, paid mainly by major Korean corporations, is projected to approach 50 trillion won this year. Analysts say the won-dollar exchange rate could fall further (won strengthening) if companies sell dollars they hold to pay the taxes.<\/p>\n
Korea Investment & Securities estimated on the 6th that August’s interim corporate tax prepayment would reach 46.1 trillion won this year. That is about 30 trillion won more than last August’s payment of 15.9 trillion won. The interim corporate tax prepayment is a system in which companies provisionally close their first-half results for the year and pay part of their corporate tax in advance, reducing the burden of tax payments. Korea Investment & Securities estimated the total corporate tax size by assuming a 15% tax rate on the combined first-half operating profit of two companies. If companies convert their dollar holdings into won to pay taxes, upward pressure on the won could increase.<\/p>\n
This potential expansion of won demand from corporate tax payments is a variable the Bank of Korea (BOK) has also been watching. BOK Governor Hyun Song Shin noted in his June founding anniversary address that if the current account surplus leads to corporate tax payments and expanded domestic investment, it could become a factor raising demand for the won.<\/p>\n
However, the 46 trillion won does not directly translate into dollar-selling volume. Companies can pay taxes using won deposits or cash holdings, so the actual scale of currency conversion varies depending on their fund management methods.<\/p>\n
Korea Investment & Securities left open the possibility of a further decline despite the recent sharp drop in the exchange rate. With the won-dollar rate falling from a recent high in the 1,550-1,560 won range to around 1,419 won, the brokerage said that if the rate falls below the lower end of its existing appropriate second-half range (1,410-1,560 won), its second-half average forecast (1,470 won) could also be adjusted. In addition, the fact that funds from SK hynix’s issuance of American Depositary Receipts (ADRs) have not all entered the market yet is cited as a factor adding downward pressure on the exchange rate. The market views this ADR fund inflow as another variable that could support won strength in August.<\/p>\n
However, some in the foreign exchange market caution that the corporate tax effect should not be overestimated. They point out that while the amount of corporate tax payments has increased, the impact of actual currency conversion demand on the exchange rate must be examined. One foreign exchange market expert said, “In the end, the current won strength is a trend created by expectations formed as corporate tax and bonus currency conversion demand overlap,” adding, “Rather than explaining it by supply and demand alone, we must also look at fundamentals such as growth momentum, investment appeal, and the difference in Korea-U.S. monetary policy.”<\/p>\n
Meanwhile, the widening current account surplus disclosed on the 6th is also a factor supporting won strength. The current account surplus in the first half of this year was $191.01 billion, nearly four times higher than the same period a year earlier. This resulted from an expanded goods account surplus driven by strong semiconductor exports. The BOK projected that the surplus would continue at a record high for the month of July as well, and having achieved 76% of the annual forecast ($250 billion) in the first half alone, the likelihood has grown that the annual surplus will exceed the previous forecast.<\/p>\n","protected":false},"excerpt":{"rendered":"Bank of Korea Governor Shin Hyun-song delivers a commemorative address at the ceremony marking the central bank’s 76th…\n","protected":false},"author":2,"featured_media":110801,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,846,6639,56834,56833,11697,28059,56835,850],"class_list":["post-110800","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bok","tag-current-account-surplus","tag-interim-tax-prepayment","tag-korea-corporate-tax","tag-korea-investment-securities","tag-sk-hynix-adr","tag-won-strength","tag-won-dollar-exchange-rate"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/110800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=110800"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/110800\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/110801"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=110800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=110800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=110800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}