Foreign currency deposits decline $4.7 billion in Oct.

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Foreign currency deposits decline $4.7 billion in Oct.

Published: 15 Nov. 2016, 20:12

For the second consecutive month, dollar deposits at banks in Korea have decreased as businesses have been withdrawing their deposits. The value of the won has fallen ahead of the U.S. Federal Reserve’s decision on interest rates.

Foreign currency deposits last month shrank $4.7 billion or 7 percent from $66.5 billion in September, the Bank of Korea said Tuesday. Dollar deposits shrank $3.8 billion won from the previous month to $52.7 billion. The U.S. dollar accounts for the largest portion of foreign currency deposits at 85.3 percent. The second largest is the Japanese yen, which accounts for 5.6 percent. Yen deposits shrank $350 million from the previous month to $3.5 billion.

The central bank cited conglomerates withdrawing their dollar deposits. Among the $3.8 billion that was withdrawn, 93 percent or $3.5 billion was by businesses while individuals withdrew only $250 million.

One of the biggest contributors, however, is the depreciation of the Korean won against the U.S. greenback. Last month, the won saw its value dropped from its lowest point of 1,102.2 won against the dollar on Oct. 4 to its highest point of 1,147.5 won on Oct. 28.