Reserves fall for first time in 6 months, BOK reports

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Reserves fall for first time in 6 months, BOK reports

Korea’s foreign currency reserve declined for the first time in six months, data from the Bank of Korea (BOK) showed.

Korea’s reserve stood at $370.8 billion at the end of July, down $3.9 billion compared with the end of June.

“Expectations of the U.S. Fed’s interest rate hike have strengthened the U.S. dollar,” said Yang Yang-hyeon, a senior BOK official.

“And this has comparatively decreased the value of other non-U.S. dollar currencies in reserves when expressing their value in the U.S. dollar,”

During July, the Australian dollar fell 5 percent in value against the U.S. dollar, while the Euro fell 2.5 percent. The Japanese yen and British pound declined 1.3 percent and 0.8 percent each against the greenback.

In terms of asset types, the value of securities in reserve declined by $1.93 billion to $337.2 billion, and cash deposits declined $1.9 billion to $23.9 billion. The value of IMF-linked special drawing rights fell by $80 million to $3.45 billion.

An IMF position, which allows the country to withdraw currencies from the International Monetary Fund, fell by $10 million to $1.44 billion.

Korea still ranks sixth among other nations in terms of the amount of foreign currency held in reserves.

China ranked first with $3.7 trillion and Japan ranked second with $1.2 trillion. Saudi Arabia and Switzerland followed with $672.1 billion and $600 billion. Taiwan came fifth with $421.4 billion.

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