South Korea’s foreign exchange reserves reached a record high level once again at the end of last year.
The Bank of Korea (BOK) said on Jan. 4 that the total amount of foreign currency holdings stood at US$403.69 billion (452.13 trillion won) as of the end of December, up US$710 million (795 billion won) from the previous month. The figures also grew for the second month in a row and surpassed US$403 billion (451 trillion won) for the first time.
By asset, marketable securities increased by US$3.35 billion (3.75 trillion won) to US$379.60 billion (425.15 trillion won), while deposits decreased by US$2.79 billion (3.12 trillion won) to US$13.73 billion (15.35 trillion won). Special drawing right (SDR), an international reserve asset created by the International Monetary Fund (IMF), grew by US$10 million (11.18 billion won) to US$3.43 billion (3.83 trillion won) and IMF reserve position, which is a convertible drawing right, by US$140 million (157 billion won) to US$21.4 billion (2.39 trillion won). Gold remained unchanged at US$4.49 billion (5.36 trillion won).
The BOK attributed the increase in its foreign exchange reserves to the appreciation in the dollar value of its non-dollar assets due to the latest depreciation of the U.S. dollar. As of the end of last year, the U.S. dollar index (DXY) fell 0.4 percent on-month to 96.40 against the currencies of six other major economies, such as the euro, pound and yen. On the other hand, the yen against the U.S. dollar rose by 2.8 percent, and the euro by 0.4 percent.
Meanwhile, the central bank said the foreign exchange reserves increased by US$14.42 billion (16.12 trillion won) over the past year, smaller than the US$18.17 billion (20.31 trillion won) increase a year earlier. South Korea’s foreign exchange reserves doubled over the past decade. The figures decreased to US$201.2 billion (224.94 trillion won) during a global financial crisis in 2008 but showed a steady rise since then.
South Korea ranked eighth in the world in terms of the amount of foreign reserve holdings as of the end of November last year. It fell to ninth place in May 2017 but climbed up again in August last year. In addition, China, Japan and Switzerland still ranked among the top.