Bank of Korea: South Korea's foreign exchange reserves decline for the second consecutive month
Due to measures aimed at stabilizing the foreign exchange market, South Korea's foreign exchange reserves declined for the second consecutive month last month.
The Bank of Korea announced on February 4 that as of the end of January, South Korea's foreign exchange reserves stood at $425.91 billion, a decrease of $2.15 billion from the previous month. This marks the second straight month of decline since the end of December last year (when reserves decreased by $2.6 billion).
At the end of May last year, South Korea's foreign exchange reserves dropped to their lowest level in about five years ($404.6 billion). Subsequently, there was a six-month streak of growth until November, with reserves reaching $430.66 billion at the end of November, but there was another decline in December. Market analysts believe the reduction in reserves was due to a significant drop in the KRW exchange rate since November last year, prompting the Bank of Korea to take measures to manage exchange rate volatility. Regarding last month's decrease in reserves, an official from the Bank of Korea explained: "The main reason was market stabilization measures such as operations related to the National Pension Service and foreign exchange swaps."
In terms of asset composition, the scale of securities assets such as government and corporate bonds was $377.52 billion, an increase of $6.39 billion; deposit-type assets totaled $23.32 billion, a decrease of $8.55 billion; the International Monetary Fund (IMF) Special Drawing Rights (SDR) amounted to $15.89 billion, unchanged from the previous month; gold reserves remained at $4.79 billion, also unchanged — this is because gold reserves are valued at their purchase price, not at current market value.
As of the end of December last year, South Korea's foreign exchange reserves stood at $428.1 billion, ranking ninth in the world, a ranking that has remained steady for three consecutive months.
Editor: Chen Yujia
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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