Mainly Due to Weaker Dollar
According to the Bank of Korea on April 4, South Korea’s foreign exchange reserves totaled a record high of US$396.75 billion as of the end of last month, showing a month-on-month increase of US$1.95 billion.
Its forex reserves increased for three months in a row from November 2017 to January 2018 but fell US$960 million in February this year before rebounding last month.
Last month, the central bank succeeded in increasing the revenue from its foreign currency-denominated assets while the U.S. dollar depreciated to result in an increase in the value of its foreign currency assets converted to the U.S. dollar and the increase in the reserves. The USD Index, which shows the value of the USD in comparison to six major currencies, fell 0.7% from 90.6 to 90.0 between the ends of February and March.
Marketable securities such as government and government agency bonds and asset-backed securities decreased by US$2.14 billion to US$363.08 billion while deposits in foreign central banks and major global banks rose US$4.09 billion to US$23.82 billion.
As of the end of February, South Korea ranked ninth in the world in terms of the size of foreign exchange reserves. China (US$3.1345 trillion) topped the list, followed by Japan (US$1.2617 trillion), Switzerland (US$825.6 billion) and Saudi Arabia (US$487.2 billion).