Foreign Currency Deposits of Residents in February Reach $97.52 Billion... "Largest Decrease on Record"

The balance of foreign currency deposits held by domestic residents in February showed a decline for the second consecutive month, marking the largest drop since statistics began.

According to the "Resident Foreign Currency Deposit Trends" released by the Bank of Korea on the 22nd, foreign currency deposits held by residents at foreign exchange banks stood at $97.52 billion at the end of last month, down $11.73 billion from the end of the previous month. This is the largest decrease since statistics were first compiled in June 2012.

Resident foreign currency deposits refer to foreign currency deposits held domestically by nationals, domestic companies, foreigners residing in Korea for more than six months, and foreign companies operating in Korea.

Resident foreign currency deposits reached a record high of $110.98 billion in December last year but fell to $109.25 billion in January and continued to decline in February.

Park Hye-jin, a manager of the Capital Movement Analysis Team at the Bank of Korea's International Department, explained, "Resident foreign currency deposits swelled to a record high in the fourth quarter of last year, and it appears that a reversal of this trend has occurred."

By currency, dollar deposits decreased by $8.19 billion compared to the previous month, while euro and yen deposits also fell by $2.15 billion and $880 million, respectively.

The decrease in dollar deposits was due to corporate payments for import settlements and withdrawals for overseas direct investment funds.

Euro and yen deposits declined due to corporate spot foreign exchange sales and other factors.

By entity, domestic banks and corporations accounted for most of the decrease in foreign currency deposits.

Corporate deposits ($82.95 billion) and individual deposits ($14.57 billion) decreased by $11.33 billion and $400 million, respectively.

Additionally, domestic banks' deposits fell by $11.6 billion to $86.85 billion, and foreign bank branches' deposits decreased by $130 million to $10.67 billion.