Profit-taking on Yen Appreciation... Yen Deposits Decrease for the First Time in 4 Months

Foreign Currency Deposits Reach $103.8 Billion as Corporate Exports Increase... Up by $2.1 Billion

Yen deposits, which had been soaring and repeatedly breaking record highs, showed a decline for the first time in four months. This was due to a decrease mainly in securities firms' investor deposits, driven by profit-taking from the yen's appreciation.

According to the "Resident Foreign Currency Deposit Trends for December 2023" released by the Bank of Korea on the 17th, the balance of resident foreign currency deposits at foreign exchange banks stood at $103.88 billion at the end of last month, up $2.12 billion from the previous month, marking a third consecutive month of increase. However, the increase was smaller than the previous month's $7.46 billion.

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.

Dollar deposits increased by $1.96 billion compared to the end of the previous month due to export growth and net sales of overseas securities by individuals, while euro deposits rose by $290 million due to foreign companies receiving domestic sales proceeds.

On the other hand, yen deposits decreased by $220 million. In the previous month, they had increased by $1.31 billion, recording the largest increase ever.

By sector, corporate deposits (balance of $88.26 billion) and individual deposits ($15.62 billion) increased by $2.02 billion and $100 million, respectively.

By bank type, domestic banks (balance of $91.76 billion) saw a decrease of $620 million, whereas foreign bank branches ($12.12 billion) increased by $2.74 billion.