Seoul, Feb 4 (IANS) South Korea’s foreign reserves fell for the second consecutive month in January amid government efforts to stabilise the foreign exchange market, the central bank said on Wednesday.
South Korea ranked as the world’s ninth-largest holder of foreign reserves as of end-December. China topped the list, followed by Japan, Switzerland, Russia and India, according to the BOK.
The country’s foreign reserves stood at US$425.91 billion as of end-January, down $2.15 billion from a month earlier, according to data from the Bank of Korea (BOK), reports Yonhap news agency.
It marked the second straight monthly decline, after the reserves fell in December for the first time since June.
“The decline was mainly attributable to market stabilisation measures, such as foreign exchange swaps with the National Pension Service (NPS),” a BOK official said.
The local currency had hovered around the psychologically important level of 1,450 won per dollar for months before sliding to a multiyear low of below 1,480 won in late December, weighed down by broad dollar strength, geopolitical risks and heavy overseas securities investments by local investors.
In response, local authorities issued strong verbal warnings and implemented various policy measures, including a one-year extension of a currency swap arrangement with the NPS and discussions on establishing a new framework to align the NPS’ investment returns with market stability.
Foreign securities, including U.S. Treasuries, rose by $6.39 billion from a month earlier to $377.52 billion at end-January, accounting for 88.6 percent of the country’s total foreign reserves.
But the value of foreign currency deposits fell by $8.55 billion to $23.32 billion, while special drawing rights (SDRs) remained unchanged at $15.89 billion.
Gold bullion holdings also stayed flat at $4.79 billion.
The country’s reserve position with the International Monetary Fund (IMF) increased by $10 million from a month earlier to $4.3 billion at the end of last month, the data showed.
—IANS
na/
