On Tuesday, data from the Bank of Korea (BOK) revealed that South Korea’s foreign reserves decreased in August due to the U.S. dollar’s appreciation and market stabilization steps.
At the end of August, the nation’s foreign reserves totaled $418.3 billion, a decrease of $3.5 billion from the prior month. The BOK attributed this to the converted value of holdings denominated in other currencies being diminished by the dollar’s rise.
The dollar index, which reflects the greenback’s value against major peers, rose by 1.5 percent during the month, the central bank stated.
Foreign reserves consist of securities and deposits denominated in foreign currencies, International Monetary Fund reserve positions, special drawing rights, and gold bullion. The value of foreign securities, such as U.S. Treasuries, was $379.03 billion as of the end of August, an increase of $2.5 billion from the month before. This accounted for 90.6 percent of the total foreign reserves.
The amount of deposits was $14.84 billion at the end of August, a significant decrease of $6.1 billion from the previous month.
South Korea was the world’s eighth-largest holder of foreign reserves as of July, according to the BOK.