South Korea’s foreign exchange reserves showed a slight decline last month after back-to-back record-breaking months.
According to the Bank of Korea, South Korea’s foreign exchange reserves totaled US$401.13 billion as of the end of August, showing a month-on-month decrease of US$1.32 billion. Previously, its forex reserves had increased for five months in a row until July to reach a record high of US$402.45 billion.
The central bank explained that the U.S. dollar appreciated last month to result in a decrease in the value of foreign currency assets converted to the U.S. dollar and the decrease in the reserves.
Last month, the USD Index, which shows the value of the U.S. dollar in comparison to six major currencies, rose 0.4% whereas euro, pound and Australian dollar depreciated by 0.4%, 1.0%, and 2.0%, respectively. Marketable securities such as government and government agency bonds and asset-backed securities decreased by US$2.07 billion from a month ago to US$372.84 billion while deposits in foreign central banks and major global banks rose US$0.78 billion to US$18.05 billion. The SDR edged down by US$30 million to US$3.53 billion. The IMF position remained at US$1.92 billion and the gold reserves remained at US$4.79 billion.
As of the end of last month, South Korea ranked ninth in the world in terms of the size of foreign exchange reserves. China (US$3.1179 trillion) topped the list, followed by Japan (US$1.2563 trillion) and Switzerland (US$804.3 billion).