South Korea's foreign exchange reserves drop for third month in row
(MENAFN) South Korea's foreign reserves experienced a third consecutive monthly decline in June 2024, according to data released by the bank of Korea and reported by a Korean news agency. The country's foreign reserves stood at USD412.21 billion at the end of June, reflecting a decrease of USD620 million compared to the previous month.
The central bank attributed the decline to its foreign exchange swap arrangement with the National Pension Fund, where dollars were provided, and the redemption of foreign exchange stabilization bonds. These transactions are part of South Korea's strategy to manage and stabilize its foreign reserves amidst changing economic conditions.
South Korea's foreign reserves comprise various components, including foreign currency-denominated securities, reserve position with the International Monetary Fund (IMF), special drawing rights (SDRs), and gold bullion. As of the end of June, foreign securities, predominantly U.S. Treasury bonds, accounted for USD363.98 billion, marking a decrease of USD6.44 billion from May and constituting 88.3 percent of the total foreign reserves.
In contrast, the value of deposits within the foreign reserves increased to USD24.43 billion by the end of June, up by USD5.94 billion from the previous month. The Bank of Korea's data positioned South Korea as the ninth-largest holder of foreign exchange reserves globally as of the end of May, underscoring its significant role in global financial markets.
Overall, the gradual adjustments in South Korea's foreign reserves reflect the country's ongoing efforts to manage liquidity and maintain stability in its financial system amidst evolving global economic dynamics.
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