Bank of Korea 'June Resident Foreign Currency Deposit Trends'
Increase in Corporate Import Payment Deposits and Overseas Investor Depository Funds
Last month, resident foreign currency deposits returned to an upward trend after six months. This was due to the temporary deposit of payment funds for corporate imports and an increase in overseas investor deposits by Seohak Gaemi (Korean individual investors investing abroad).
According to the 'Resident Foreign Currency Deposit Trends in June' data released by the Bank of Korea on the 19th, the total resident foreign currency deposit balance at foreign exchange banks at the end of June was $90.57 billion, an increase of $1.61 billion compared to the end of the previous month.
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.
Resident foreign currency deposits last increased in December last year (by $2.12 billion) and then decreased for five consecutive months this year: January (-$5.78 billion), February (-$1.97 billion), March (-$1.12 billion), April (-$3.66 billion), and May (-$2.39 billion), before turning to an increase last month.
By currency, deposits in US dollars, euros, and Japanese yen all increased. Dollar deposits had been declining for five consecutive months since January this year amid perceptions that the won-dollar exchange rate had peaked, but turned to an increase after six months.
Lee Jong-chan, head of the capital movement analysis team at the Bank of Korea, explained the reason for the increase in dollar deposits: "Payment funds for imports by companies such as oil refiners were temporarily deposited at the end of the month, and Seohak Gaemi increased their investments in overseas stocks and bonds, leading to an increase in investor deposits held at securities firms."
Euro deposits increased by $100 million compared to the previous month due to export payment deposits from some companies.
Yen deposits increased by $60 million compared to the previous month amid expectations of a strong reversal due to the continued weakness of the yen. The average won-yen exchange rate fell from 875.48 won in May to 873.52 won in June.
By depositor type, corporate deposits stood at $75.48 billion, up $1.53 billion from the previous month, while individual deposits were $15.09 billion, up $80 million from the previous month.
By bank type, domestic banks' deposit balances increased by $1.04 billion from the previous month to $79.9 billion. Foreign bank branches' deposits rose by $570 million to $10.67 billion compared to the previous month.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
