The Korea Herald


S. Korea's FX reserves fall by most in 13 months in June

By 김정보

Published : July 3, 2013 - 09:32

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South Korea's foreign exchange reserves fell by the largest amount in 13 months in June due to repayment of maturing currency stabilization bonds and a stronger U.S. dollar, the central bank said Wednesday.

The country's foreign reserves reached US$326.44 billion as of end-June, down $1.66 billion from a month ago, according to the Bank of Korea (BOK).

The FX reserves fell by the most since May last year when they declined by $5.97 billion. The June data also marked the lowest level since November when they amounted to $326.1 billion.

Korea's foreign reserves hit a record $328.91 billion in January.

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

A BOK official said that the FX reserves declined last month as the country repaid the 10-year foreign exchange stabilization bonds worth $1 billion and the weakness in the euro and the Australian dollar drove down their dollar conversion value.

The dollar has been on the rise against major currencies as Federal Reserve Chairman Ben Bernanke said that the U.S. central bank could start to slow the pace of its bond purchase later this year and possibly end it by mid-2014.

The euro inched down 0.1 percent to the U.S. dollar while the Australian dollar declined 4.2 percent per the greenback on falling commodity prices and a weaker-than-expected growth data.

Despite monthly fluctuations, the FX reserves have been on the rise, aided by the continued trade surplus and inflows of foreign capital.

As of the end of May, South Korea was the world's seventh-largest holder of foreign exchange reserves. (Yonhap News)