As the won-dollar exchange rate rose, residents' foreign currency deposits turned to a decline for the first time in five months.
According to the "October Residents' Foreign Currency Deposit Trends" data released by the Bank of Korea on the 17th, residents' foreign currency deposits at foreign exchange banks stood at $98.97 billion at the end of last month, down $5.1 billion from the end of the previous month.
Residents' foreign currency deposits include foreign currency deposits held domestically by nationals, domestic companies, foreigners residing in Korea for more than six months, and foreign companies operating in Korea. Residents' foreign currency deposits had increased for four consecutive months until last month due to a rise in export-import related dollar deposits by companies.
However, last month, the won-dollar exchange rate surged significantly, and payments for companies' import settlements led to a shift to a decline. The exchange rate soared from 1,319.6 won at the end of September to 1,383.3 won at the end of October. A Bank of Korea official explained, "The rise in the exchange rate significantly affected the decrease in demand for reserve funds by export-import companies and the increase in spot foreign exchange sales."
By currency, dollar deposits, euro deposits, and yuan deposits decreased by $3.1 billion, $800 million, and $600 million respectively compared to the end of the previous month.
By entity, corporate deposits decreased by $4.47 billion, and individual deposits also decreased by $630 million. By bank type, domestic banks saw a decrease of $5.49 billion, while foreign bank branches increased by $390 million.
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