Foreign currency deposits surge to 2-year highForeign currency deposits at banks in Korea surged to the highest amount in over two years last month, central bank data showed Tuesday, amid pandemic-triggered uncertainties that apparently prompted local businesses to stockpile hard currency.
Foreign currency deposits held by local residents came to $80.92 billion as of end-May, up $2.74 billion from a month earlier, according to the data from the Bank of Korea (BOK).
The reading marks the highest since March 2018, when foreign currency deposits stood at $81.33 billion. Local residents include foreign entities who have stayed here for more than six months.
The increase was largely attributed to a sharp rise in U.S. dollar deposits and those held by businesses.
In May, foreign currency deposits held by businesses added $2.96 billion from a month earlier to $64.94 billion, while those held by individuals slipped $220 million to $15.98 billion over the cited period, according to the BOK.
Dollar-denominated deposits gained $1.92 billion from a month before to $69.92 billion as of end-May. Savings held in Japanese yen slipped $10 million to $3.99 billion, with deposits in Chinese yuan adding $80 million to $1.28 billion.
Such a rise apparently follows increased fluctuations in the won-dollar exchange rate.
The local currency traded at an average 1,238.5 won per dollar in May, down 20.3 won, or 1.7 percent, from 1,218.2 won per dollar the month before, according to the BOK.
The daily fluctuation rate, however, narrowed to 4.4 won in May from 5.6 won in April, the BOK said earlier.