Forex Reserves
It has been found that South Korea’s foreign exchange reserves dropped by more than US$1 billion last month as a result of Brexit. The decline continued for the second consecutive month.
The Bank of Korea announced on July 5 that South Korea’s foreign exchange reserves totaled US$369.89 billion as of the end of last month, US$1.01 billion less than a month ago. “This is mainly because of a decline in the value of non-USD denominated foreign currency assets converted to USD that is attributable to Brexit,” the central bank explained. Last month, the USD-GBP exchange rate fell 8% from the previous month to US$1.3454 per British Pound.
By asset type, the forex reserves showed the steepest decline in deposits. Specifically, the amount decreased US$1.1 billion month on month to US$25.27 billion. In contrast, marketable securities increased by US$0.13 billion to US$335.48 billion. The IMF SDR and position fell US$20 million and US$10 million to US$2.54 billion and US$1.81 billion, respectively.
At the end of May this year, South Korea ranked seventh in the world in terms of the size of foreign exchange reserves. China topped the list with US$3.1917 trillion, followed by Japan (US$1.254 trillion), Switzerland (US$645.5 billion), Saudi Arabia (US$581.3 billion), Taiwan (US$433.4 billion) and Russia (US$387.7 billion).