South Korea’s Foreign Exchange Reserves Fell for the Third Consecutive Month

According to the Bank of Korea, South Korea’s foreign exchange reserves totaled US$371.1 billion as of the end of December last year, showing a month-on-month decrease of US$880 million to hit a six-month low. The amount had decreased US$2.6 billion in October and US$3.18 billion in November last year as well.

Last month, the U.S. dollar appreciated based on the interest rate hike by the Federal Reserve and expectations for economic stimulus by the Donald Trump administration and this resulted in a decrease in the value of the Bank of Korea’s foreign currency assets converted to the U.S. dollar and the decline in the reserves.

Marketable securities accounted for US$343.33 billion out of the total forex reserves, increasing by US$6.45 billion from a month ago, while deposits fell US$7.29 billion to US$18.37 billion. The SDR declined by US$30 million to US$2.88 billion and the IMF position edged down by US$20 million to US$1.73 billion. The gold reserves remained at US$4.79 billion.

South Korea’s forex reserves increased US$3.14 billion during the course of 2016. As of the end of November, South Korea ranked eighth in the world in terms of the size of foreign exchange reserves. China (down US$69.1 billion to US$3.0516 trillion) topped the list, followed by Japan (down US$23.5 billion to US$1.2193 trillion), Switzerland (up US$600 million to US$685.8 billion), Saudi Arabia (down US$5.6 billion to US$538.3 billion), Taiwan (down US$900 million to US$434.3 billion), Russia (down US$5.5 billion to US$385.3 billion) and Hong Kong (up US$1.9 billion to US$385 billion).