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Korea's foreign reserves hit fresh five year low in February

Published: 06 Mar. 2025, 10:19 Updated: 06 Mar. 2025, 14:09

An official checks dollar notes at Hana Bank's Counterfeit Notes Response Center in Seoul on Feb. 5. [YONHAP]

Korea's foreign reserves fell from a month earlier in February to reach the lowest level in nearly five years amid the weak local currency, central bank data showed Thursday.

The country's foreign reserves had come to $409.21 billion as of the end of February, down $1.8 billion from a month earlier, according to the data from the Bank of Korea (BOK).

It was the lowest level since May 2020, when the figure stood at $407.31 billion.

The BOK attributed the decrease to financial authorities' responses to the volatility in the foreign exchange market.

The BOK and the National Pension Service agreed in December to raise their currency swap deal to $65 billion from $50 billion and to extend the deal by one year to the end of 2025.

The local currency has stayed well below 1,450 won against the U.S. dollar, a level unseen in about 16 years, amid domestic political chaos caused by President Yoon Suk Yeol's martial law imposition and the strengthening of the greenback.

Foreign securities, such as U.S. Treasuries, had been valued at $357.38 billion as of the end of February, down $4.64 billion from a month earlier. They accounted for 87.3 percent of foreign reserves.

The value of deposits, however, had risen $2.71 billion to $28.01 billion over the cited period.

Foreign reserves consist of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.

Korea ranked as the world's ninth-largest holder of foreign reserves at the end of February.

China topped the list, followed by Japan, then Switzerland, India and Russia, the data showed.

Yonhap