U.S. Dollar Demand Continues to Increase
Foreign currency deposits hit an all-time high based on an increasing U.S. dollar demand from both enterprises and individual investors.
The Bank of Korea announced on Nov. 18 that residents’ foreign currency deposits in foreign exchange banks increased by US$7.87 billion to US$93.32 billion last month, exceeding US$90 billion for the first time ever.
The deposits can be defined as those owned by local individuals and companies, foreigners staying for at least six months in South Korea, and foreign companies doing business in South Korea. Previously, the deposits set new records for three months in a row until August and then decreased US$3.1 billion in September.
Those of enterprises increased US$7.2 billion to US$74.73 billion last month. Those of individuals rose US$670 million to US$18.59 billion. The U.S. dollar deposits increased US$6.85 billion to US$80.32 billion and the euro deposits showed an increase of US$540 million to US$4.4 billion.
“With both exports and imports recovering, enterprises deposited more money for settlement purposes,” the central bank explained, adding, “In addition, securities companies increased their short-term funds.”