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Foreign reserves down in August on strong dollar, stabilization measures

September 6, 2023

South Korea’s foreign reserves fell in August due to the U.S. dollar’s rise and market stabilization measures, central bank data showed Tuesday.

The country’s foreign reserves came to US$418.3 billion as of end-August, down $3.5 billion from the previous month, according to the data from the Bank of Korea (BOK).

The dollar’s ascent last month reduced the converted value of holdings denominated in other currencies, the BOK explained.

The dollar index that gauges the greenback’s value against major peers rose 1.5 percent last month, the central bank said.

Foreign reserves consist of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.

Foreign securities, such as U.S. Treasuries, had been valued at $379.03 billion as of end-August, up $2.5 billion from a month earlier. They accounted for 90.6 percent of foreign reserves, the data showed.

The value of deposits stood at $14.84 billion at the end of August, sharply down $6.1 billion from a month earlier.

South Korea ranked as the world’s eighth-largest holder of foreign reserves at the end of July, the BOK said.