South Korea's Vice Finance Minister, Moon Jisung, stated on Tuesday that the Korean won may experience additional appreciation, driven by an expected increase in corporate dollar forward selling later this year.

The won has recently strengthened against the US dollar, yet it remains below levels that would be consistent with South Korea's fundamental economic conditions.

Moon indicated that South Korea anticipates a "significant shift" in capital flows during the second half of the year. Market conditions, such as dollar inflows related to SK Hynix's American Depositary Receipts (ADRs), suggest broader changes are occurring in market fund movements.

Moon further stated that corporate dollar forward selling is expected to rise further in the third quarter. He also forecast that Korean companies, particularly within the semiconductor sector, will increase their spot and forward dollar selling volumes.

"If the momentum of corporate spot and forward dollar selling intensifies, it could also shift the sentiment of retail investors, further accelerating the appreciation of the won," Moon added.