Bank of Korea's 'April Resident Foreign Currency Deposit Trends'
Dollar Deposits Decrease Amid Perception of High Won-Dollar Exchange Rate
Last month, as companies delayed purchasing dollars due to the perception that the won-dollar exchange rate was high, dollar deposits decreased by 3.26 billion dollars.
According to the 'April Resident Foreign Currency Deposit Trends' data released by the Bank of Korea on the 24th, dollar deposits among resident foreign currency deposits at foreign exchange banks at the end of April decreased by 3.26 billion dollars compared to the end of the previous month. On the 17th of last month, the won-dollar exchange rate touched the 1,400 won level during trading hours, prompting the foreign exchange authorities to conduct an emergency verbal intervention.
Resident foreign currency deposits refer to domestic foreign currency deposits held by nationals, domestic companies, foreigners residing in Korea for more than six months, and foreign companies operating in Korea. The total resident foreign currency deposit balance at the end of April was 91.35 billion dollars, down 3.66 billion dollars from the end of the previous month. The resident foreign currency deposit balance has been declining for four consecutive months following January (-5.78 billion dollars), February (-1.97 billion dollars), and March (-1.12 billion dollars) of this year.
Lee Jong-chan, head of the Capital Movement Analysis Team at the Bank of Korea, said, "Both export and import companies temporarily deposit foreign currency funds before making payments," adding, "If the exchange rate rises too much at that time, they delay the timing of foreign currency purchases." He continued, "In April, there was a perception that the won-dollar exchange rate was at a high level, so companies delayed dollar purchases," explaining, "Resident foreign currency deposits decreased mainly due to dollar deposits."
Euro deposits decreased by 550 million dollars compared to the end of the previous month due to dividend payments by some foreign companies.
Yen deposits also decreased by 110 million dollars as the amount converted to US dollars declined due to yen weakness.
By deposit holder, corporate deposits stood at 76.51 billion dollars, down 3.54 billion dollars from the previous month, while individual deposits were 14.84 billion dollars, down 120 million dollars from the previous month.
By bank, domestic bank deposits were 81.54 billion dollars, down 2.34 billion dollars from the previous month. Foreign bank branches held 9.81 billion dollars, down 1.32 billion dollars from the previous month.
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