FX Reserves
It has been found that the ratio of the U.S. dollar to the Bank of Korea’s foreign currency assets reached 66.6% at the end of last year, increasing 4.1 percentage points from a year ago. For reference, the ratio had been 63.7% in 2010, 60.5% in 2011, 57.3% in 2012 and 58.3% in 2013.
During the same one-year period, South Korea’s foreign exchange reserves increased by US$4.368 billion to US$367.961 billion. The foreign exchange reserves were divided into US$358.5 billion in foreign currency assets, US$4.8 billion in gold, US$1.4 billion in IMF position and US$3.2 billion in IMF SDR.
Liquid assets and earning assets accounted for 4.5% and 80% of the foreign exchange reserves while the rest was entrusted assets. The ratios of corporate bond and government bonds were reduced whereas that of deposits increased.
The Bank of Korea explained that it raised the ratio of U.S. dollar-denominated assets and reduced that of those based on the other currencies as the U.S. dollar is expected to appreciate based on the recent solid growth of the U.S. economy and expectations for an interest rate hike by the Fed. The central bank added that the current ratio is a level entailing no problem with regard to liquidity supply.