S. Korea's FX Deposits Decline in March

(MENAFN) South Korea's foreign currency holdings contracted for a third month running in March, as a sharp appreciation of the won against the dollar triggered a record-breaking wave of currency conversions, fresh data from the country's central bank revealed Wednesday.

Total foreign currency deposits plummeted $15.37 billion from the previous month to $102.17 billion by the end of March, according to the Bank of Korea (BOK) — extending a sustained downward trend that began in January and marking the steepest single-month decline on record.

The driving force behind the selloff was a dramatic spike in the won-to-dollar exchange rate, which surged to 1,530.1 won per dollar at March-end, up sharply from 1,439.7 won recorded just a month prior. The stronger won incentivized both businesses and individuals to offload dollar holdings in favor of local currency.

The breakdown by currency painted a broadly negative picture across the board. Dollar-denominated deposits bore the heaviest losses, tumbling $10.36 billion to $85.64 billion. Japanese yen deposits retreated $1.49 billion to $7.82 billion, while European currency holdings shed $3.28 billion to settle at $6.31 billion. Chinese yuan deposits edged marginally lower by $60 million to $1.17 billion.

The decline was felt across both corporate and individual depositors. Company-held foreign currency deposits fell $13.43 billion to $86.80 billion, while deposits belonging to private individuals dropped $1.93 billion to $15.37 billion — underscoring the breadth of the currency conversion trend across South Korea's financial landscape.

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