Last month, resident deposits fell below US$100 billion (133.65 trillion won), marking a decline for the first time in four months. This decline is attributed to the strong dollar phenomenon, which has led to a reduction in the conversion value of deposits denominated in euros and yen.
According to the “Resident Foreign Currency Deposit Trends in August” announced by the Bank of Korea on Sept. 22, domestic resident foreign currency deposits in the last month were recorded at US$99.1 billion, showing a decrease of US$5.9 billion from the previous month. The foreign currency deposit balance had been increasing for three consecutive months from May to July after a decrease of US$6.1 billion in April but returned to a declining trend after four months.
Resident foreign currency deposits refer to foreign currency deposits held by domestic residents, including South Korean individuals, domestic companies, foreign individuals residing in South Korea for more than six months, and foreign companies with a presence in South Korea.
By currency, the decline in U.S. dollar deposits can be attributed to factors such as settlement of import payments, some companies’ overseas investments, and a decrease in brokerage account deposits by investors. U.S. dollar deposits decreased by US$4.82 billion to US$83.04 billion, marking the first decline in four months.
Japanese yen deposits recorded a decrease of US$30 million, totaling US$8.28 billion, showing a decline after four months. Euro deposits decreased by US$790 million to US$5.23 billion. Chinese yuan deposits contracted by US$140 million, reaching US$1.24 billion.
The reduction in the conversion amount can be attributed to the continued strength of the U.S. dollar, following payments for import settlements. In the previous month, the U.S. dollar index increased by approximately 1.7 percent.
By entity, corporate deposits decreased by US$5.24 billion, reaching a balance of US$84.44 billion. Meanwhile, individual deposits declined by US$66 million, totaling US$14.66 billion.
The deposit balance in domestic banks amounted to US$89.35 billion, marking a decrease of US$4.98 billion. On the other hand, deposits in overseas branches of domestic banks reached US$9.75 billion, experiencing a decrease of US$920 million.