"Used for Raw Material Payments and Debt Repayment" Foreign Currency Deposits Decline for Third Consecutive Month

Payments for Raw Materials and Foreign Currency Loan Repayments by Companies
Sharp Decline in Corporate Dollar Deposits

Resident foreign currency deposits have declined for the third consecutive month. The decrease was particularly pronounced in US dollar deposits, mainly due to companies making payments for raw material purchases and repaying foreign currency loans.

Yonhap News Agency

According to the "Trends in Resident Foreign Currency Deposits for April 2025" released by the Bank of Korea on May 26, resident foreign currency deposits at foreign exchange banks stood at $96.26 billion at the end of last month. This represents a decrease of $680 million from the previous month, with the decline centered on corporate deposits. This marks the third consecutive month of decline. Resident foreign currency deposits include foreign currency deposits held in Korea by domestic individuals, domestic companies, foreigners who have resided in Korea for more than six months, and foreign companies operating in Korea.

By currency, US dollar deposits, which account for the largest share (84.2%) of resident foreign currency deposits, fell by $2.08 billion from the previous month to $81.01 billion. An official from the Bank of Korea explained, "Dollar deposits declined due to companies making payments for raw material purchases and repaying foreign currency loans."

In contrast, euro deposits and yuan deposits increased by $970 million and $310 million, respectively, reaching $5.08 billion and $1.17 billion. The increase in euro deposits is attributed to temporary deposits of settlement funds resulting from the euro's strength. The won-euro exchange rate rose by 50.3 won, from 1,587.9 won at the end of March to 1,638.2 won at the end of April. The increase in yuan deposits was due to some companies receiving dividend payments.

By depositor, corporate deposits decreased by $980 million to $82.41 billion, while individual deposits increased by $300 million to $13.85 billion. By bank, domestic banks saw an increase of $980 million to $83.8 billion, while branches of foreign banks recorded a decrease of $1.66 billion to $12.46 billion.