Residents' Foreign Currency Deposits Down $1.4 Billion in January... US Dollar and Yen Still Increasing

Sharp Drop in Euro Deposits as Some Companies Pay for Current Transactions
Dollar Deposits Rise, Led by Individuals Amid Falling Exchange Rates

At the end of last month, residents' foreign currency deposits decreased by $1.4 billion compared to the end of December last year, when they had reached the highest level since June 2012. However, this decline was mainly due to some companies withdrawing euros from temporary deposits made in December 2025 to pay for current transactions. Meanwhile, deposits from dollar and yen investors are still on the rise.

According to the "Trends in Residents' Foreign Currency Deposits for January 2025" released by the Bank of Korea on February 26, the balance of residents' foreign currency deposits at foreign exchange banks as of the end of last month stood at $118.03 billion.

While deposits in US dollars and Japanese yen increased, a decrease in euro deposits led to an overall decline in residents' foreign currency deposits. At the end of last month, US dollar deposits increased by approximately $400 million from the previous month to $96.34 billion, and yen deposits rose by $520 million to $9.51 billion. In contrast, euro deposits fell by $2.36 billion from December 2025 to $9.39 billion, while yuan deposits decreased by $70 million to $1.38 billion. The Bank of Korea explained, "The decline in euro deposits was due to certain companies using previously deposited euros in December to pay for current transactions. Yen deposits increased as companies received funds for current transactions and securities firms deposited funds for yen-denominated bond purchases. Dollar deposits also grew, mainly among individuals, as the KRW-USD exchange rate fell in late January." On January 21, the KRW-USD exchange rate was 1,471.3 won, but by January 29 it had dropped by 45 won to 1,426.3 won.

By depositor type, the decrease was concentrated among corporate deposits. Corporate deposits fell by $1.82 billion to $100.68 billion. Individual deposits, on the other hand, rose by $420 million to $17.35 billion. By bank type, domestic banks saw a decrease of $2.72 billion to $98.88 billion, while foreign bank branches increased by $1.32 billion to $19.15 billion.

This content was produced with the assistance of AI translation services.