Due to Exchange Rate Rise... Resident Foreign Currency Deposits Decline for Two Consecutive Months

Trends in Resident Foreign Currency Deposits in November

As the exchange rate continued to rise, residents' foreign currency deposits decreased for the second consecutive month.

Yonhap News

According to the "November Resident Foreign Currency Deposit Trends" data released by the Bank of Korea on the 16th, residents' foreign currency deposits at foreign exchange banks stood at $98.43 billion at the end of last month, down $540 million from the end of the previous month.

Residents' foreign currency deposits include domestic foreign currency deposits of 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 September as companies' dollar deposits related to exports and imports rose, but turned to a decline in October as the won-dollar exchange rate surged. The won-dollar exchange rate soared from 1,319.6 won at the end of September to 1,383.3 won at the end of October and continued to rise to 1,394.7 won at the end of November. The won-yen exchange rate also rose significantly from 902.2 won at the end of October to 920.87 won at the end of November.

By currency, dollar deposits and yen deposits decreased by $110 million and $430 million respectively compared to the end of the previous month. Euro deposits decreased by $40 billion, yuan deposits by $300 billion, while other currencies such as the British pound and Australian dollar increased by $700 billion.

A Bank of Korea official explained, "Dollar deposits decreased as non-financial corporations and individuals increased spot foreign exchange sales due to the rise in the won-dollar exchange rate," but added, "However, the increase in dollar deposits by non-bank financial institutions offset this, resulting in only a slight decrease."

He added, "Yen deposits decreased as spot foreign exchange sales by non-financial corporations and individuals increased due to the rise in the won-yen exchange rate."

By entity, corporate deposits decreased by $330 million, and individual deposits decreased by $210 million. By bank type, domestic banks saw a decrease of $2.86 billion, while foreign bank branches increased by $2.32 billion.