Amid scarce investment options in low-interest environment, the U.S. dollar in weakening trend has become popular safe target for both petty and big money in Korea.

An exchange corner at the Seoul Station in downtown usually has a long line during lunchtime with people making daily visits to exchange the Korean won into the greenback.

“Daily limit is 1 million won. Many come every day,” an office worker in his 30s said. He plans to keep buying until the dollar falls to 1,050 won. Retailers prefer private exchanges over banks as they charge less.

The dollar that hovered around 1,200 won at the beginning of the year has been flirting around 1,100 won. At 1:50 p.m. Wednesday, the dollar gained 6 won from the previous day at 1,113. 5 won.

Traders agree it is the best time to stack up the greenback with the dollar set to go higher later in the year when the U.S. Federal Reserve would be renewing tightening cycle, whereas the Korean central bank may be forced to consider another rate cut if the economy slows further.

According to multiple sources from the financial investment industry, the total amount of dollar holdings by Daishin Securities Co. has almost doubled from $168.83 million at the end of May to $311.21 million by the end of July. Last month, a total of $112.77 million flowed in, almost four times more than $29.61 million in June.

Choi Kwang-chul, head of product planning at Daishin Securities Co., said that financial consumers are mostly buying dollar-based repurchase agreements (RP) while some are investing in overseas stocks.

The Industrial Bank of Korea’s wealth management center in Banpo-dong, southern Seoul, has also witnessed foreign exchange trade volume jump 60 times in August from a month earlier amid increasing demand for dollars.

Daily dollar trade that averaged $10,000 to $20,000 in July jumped 10-fold later in the month, said Kim Tae-gyu, head of private banking at the center.

On Aug. 1 alone, more than $600,000 changed hands - entirely for investment, he said.

By Kim Tae-joon and Park Yoon-ye

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]