Reserves rose $14.33 billion from end of previous month

Surge driven by increase in foreign currency deposits at financial institutions

Bank of Korea to stop disclosing global reserve rankings

Dollar bills. [Reuters]
Dollar bills. [Reuters]

South Korea's foreign exchange reserves surged by the largest margin on record last month, driven by a rise in foreign currency deposits at financial institutions.

According to the Bank of Korea on Thursday, the country's foreign reserves stood at $442.28 billion at the end of August, up $14.33 billion from the end of the previous month ($427.95 billion). The figure was the highest since May 2022 ($447.71 billion), a span of roughly three years and three months. The monthly increase was the largest since the central bank began tracking the data.

The reserves have now risen for three consecutive months since June.

"Foreign currency deposits at financial institutions increased significantly, and this was compounded by investment returns and a rise in the dollar-converted value of non-dollar foreign currency assets," the Bank of Korea said.

By asset type, deposits — a cash-equivalent asset — rose $7.17 billion to $30.3 billion from $23.13 billion the previous month. Securities, including US government bonds, agency bonds and corporate bonds, also increased $7.07 billion to $30.3 billion over the same period.

Special drawing rights, the IMF's reserve asset, rose $60 million to $15.77 billion, while the IMF reserve position increased $30 million to $4.34 billion. Gold holdings were unchanged at $4.79 billion.

Meanwhile, the Bank of Korea said it will no longer publish South Korea's global ranking in foreign reserve holdings, a figure it had previously released alongside the monthly reserve data.

"We determined that comparing reserve levels by ranking has limited informational value," a Bank of Korea official said. "A change in ranking does not reflect a change in external soundness, yet there was potential for such misunderstanding. Taking all of that into consideration, we concluded it was better to leave that information out."


kimstar@heraldcorp.com