Korea has once again recorded the highest amount of foreign exchange reserves possessed, at US$330 billion.
On September 4, Bank of Korea announced its “End of August 2013 Foreign Exchange Possession,” which reported that the current foreign exchange is at US$331.09 billion, which is US$1.38 billion higher than last month. This means the most recent record that was set in July at US$329.71 billion was broken the very next month.
Possession of foreign exchange had been decreasing from US$328.8 billion in April to US$328.1 billion in May, and then US$326.44 billion in June. It is since July that the numbers began to climb again.
A Bank of Korea associate said, “The currency exchange rate in August actually decreased the number a little, but the total amount increased due to the possession of bonds and interest profits.”
These foreign exchange possessions consist of US$32.11 billion (91.2%) in marketable securities, which is the highest it has ever been. Others are US$18.16 billion in balances and US$4.79 billion in gold. The International Monetary Fund (IMF) special drawing rights (SDR) is US$3.43 billion (1.0%), and the IMF position is US$2.6 billion (0.8%).
By the end of July, the current size of Korea's possession of foreign exchange ranked 7th in the world, which has not changed since the month before. First place is China, with US$3.4967 trillion. Japan is second (US$1.254 trillion), then Switzerland (US$517.3 billion), Russia (US$512.8 billion), Taiwan (US$409.1 billion), and Brazil (US$372 billion).
However, there continues to be controversy over the appropriateness of the amount of foreign exchange possessed, despite the fact that it is the highest yet, due to the US reduction of quantitative easing and risks of emerging financial market collapse. Some criticize that the country should bring it up to US$400 billion, since the current amount is less than that of India or Indonesia showing signs of market collapse.