This study examines the determinants of invoicing currency choice in South Korea’s international trade and analyzes how exchange rates affect trade outcomes across invoicing currencies. Using Korean product-level customs data, it documents distinctive patterns in Korea’s invoicing currency composition and identifies key factors shaping firm-level currency choices for exports.

These factors include the invoicing currency composition of imported intermediate goods, firm-level foreign-currency debt ratios, past invoicing practices, export market share, foreign exchange market size, invoicing currencies of competitors, and exchange rate volatility.

The results show that the degree of exchange rate pass-through varies significantly by invoicing currency, leading to meaningful differences in export volumes. Building on these findings, the study investigates the impact of recent exchange rate movements on Korea’s exports and demonstrates that the dominance of the U.S. dollar as invoicing currency imposes significant constraints on Korean export performance.

This study provides an updated and comprehensive overview of Korea’s invoicing currency patterns in trade, offering rich implications regarding the determinants and consequences of invoicing currency choice. The findings are expected to inform ongoing policy discussions on the revision of the Foreign Exchange Transactions Act, the internationalization of the Korean won, and broader initiatives aimed at advancing Korea’s foreign exchange market.

Abstract (ENG)
Preface
Summary (KOR)

Chapter 1 Introduction
　Section 1 Overview
　Section 2 Literature Review

Chapter 2 The Current Status of Invoicing Currencies in Korea’s Exports and Imports
　Section 1 Overall Trends in Invoicing Currencies of Korea’s Exports and Imports
　Section 2 Micro-Level Patterns of Invoicing Currencies in Korea’s Exports and Imports

Chapter 3 Determinants of Export Invoicing Currency Choice
　Section 1 Theoretical Models and Empirical Findings on Invoicing Currency Choice
　Section 2 Empirical Analysis of Determinants of Invoicing Currency Choice in Korean Exports

Chapter 4 Differential Effects of Exchange Rates by Invoicing Currency
　Section 1 Exchange Rate Pass-Through by Invoicing Currency
　Section 2 Effects of Exchange Rates on Export Volumes
　Section 3 Implications of Invoicing Currency Choice amid Recent Exchange Rate Fluctuations

Chapter 5 Conclusion and Policy Implications

References
Appendix