South Korea’s central bank said Friday it had raised its holdings of gold in four months in November in an effort to diversify its portfolio of foreign exchange reserves worth more than $300 billion.

South Korea purchased 15 tonnes of gold, raising the country’s gold holding to 54.4 tonnes at a value of $2.17 billion at the end of November, according to the Bank of Korea.

The move marked the BOK’s second purchase of the precious metal so far this year. It bought 25 tonnes of gold bullion in June and July for the first time in 13 years.

“The BOK increased its gold holding in a bid to diversify its portfolio of FX reserves,” Lee Jung, head of the BOK’s investment strategy team, told reporters.

Lee declined to comment on the purchasing prices of gold and future buying plans, citing their possible impact on the market.

The BOK’s move came as a grim global economic outlook and the eurozone debt crisis revive investors’ demand for safe assets.

Central banks around the globe, such as Mexico and Russia, bought a total of around 350 tonnes of gold this year in an effort to diversify their portfolios of FX reserves, according to the BOK. Amid ample liquidity, gold is widely viewed as a way to hedge inflation risks and a brittle global economic outlook is making gold bullion more attractive as a safe asset.

The BOK has been making efforts to diversify its foreign exchange reserves by curtailing the portion of its U.S.

dollar-denominated assets. Gold bullion accounted for 0.7 percent out of the total reserves as of the end of November.

South Korea’s foreign exchange reserves declined in November as a stronger U.S. dollar drove down the conversion value of non-dollar assets such as the euro, the BOK noted.

Korea’s foreign exchange reserves totaled $308.63 billion as of the end of November, down $2.35 billion from the previous month.

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

Last month, the euro depreciated 2.9 percent to the dollar and the British pound fell 2.4 percent per the greenback.

As of the end of October, South Korea was the world’s eighth-largest holder of foreign exchange reserves. 

(Yonhap News)