BOK reports foreign bank deposits at 8-month low

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BOK reports foreign bank deposits at 8-month low

Foreign currency deposits at Korean banks fell to their lowest level in eight months in January as Korean firms withdrew money to cover import bills, the central bank said yesterday.

Outstanding foreign currency denominated deposits held by local residents reached $32.51 billion at the end of January, down $3.52 billion from the previous month, according to the Bank of Korea (BOK).

The January data marked the lowest level since May, when deposits hit $30.88 billion, it added. Banks’ FX deposits declined for the third straight month after hitting a record high of $39.39 billion in October.

Residents include individual citizens and firms but not foreign nationals with residency status. The data also excludes inter-bank foreign currency deposits.

Companies’ holdings of FX deposits fell $3.33 billion month-on-month to $28.71 billion and deposits held by individuals inched down $190 million to $3.8 billion, the central bank added.

In January, the local currency appreciated 1.09 percent against the dollar, compared to December.

Last June, the government unveiled plans to encourage local banks to secure more foreign currency deposits in a bid to build a safety net from external shocks. Yonhap

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