Foreign Exchange Reserves in August at $418.3 Billion... Decrease of $3.5 Billion in One Month

Dollar Strength Turns to Decline After 3 Months

On the 14th, an employee is organizing dollars at the Hana Bank Counterfeit Response Center in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

South Korea's foreign exchange reserves decreased by 3.5 billion dollars last month, marking a decline for the first time in three months.

The Bank of Korea announced on the 5th that as of the end of August, South Korea's foreign exchange reserves stood at 418.3 billion dollars, down 3.5 billion dollars from the end of the previous month.

The foreign exchange reserves had increased for two consecutive months from 420.98 billion dollars in May to 421.45 billion dollars in June and 421.8 billion dollars in July, but decreased again last month after three months.

The Bank of Korea explained, "The decrease in the dollar equivalent of foreign currency assets in other currencies and measures to ease volatility in the foreign exchange market led to the decline in foreign exchange reserves." The measures to ease foreign exchange market volatility also included a temporary effect from the foreign exchange swap agreement between the Bank of Korea and the National Pension Service.

According to the Bank of Korea, the US dollar index rose 1.5% in one month, from 101.62 at the end of July to 103.16 at the end of last month.

Breaking down the foreign exchange reserves by asset type, securities such as government and corporate bonds (379.03 billion dollars) increased by 2.5 billion dollars, while deposits, which correspond to cash, sharply decreased by 6.13 billion dollars.

Additionally, Special Drawing Rights (SDR) with the International Monetary Fund (IMF) (15.05 billion dollars) increased by 240 million dollars, while the 'IMF position,' which is the right to draw exchangeable currency from the IMF (4.59 billion dollars), decreased by 120 million dollars.

Gold reserves remained unchanged at 4.79 billion dollars compared to the previous month, as they are recorded at the purchase price without reflecting market prices.

As of the end of July, South Korea ranked 8th in the world in terms of the size of foreign exchange reserves, the same as the previous month.

China had the largest reserves at 3.2043 trillion dollars, followed by Japan (1.2537 trillion dollars), Switzerland (883.9 billion dollars), India (605.8 billion dollars), Russia (590 billion dollars), Taiwan (566.5 billion dollars), and Saudi Arabia (426.9 billion dollars).