February Foreign Exchange Reserves Decrease for the First Time in 6 Months... Impact of Stronger US Dollar

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Last month, South Korea's foreign exchange reserves showed a decline for the first time in six months. The strengthening of the US dollar led to a decrease in the dollar value of foreign currency assets denominated in other currencies such as the euro and the pound.

According to the "Foreign Exchange Reserves at the End of February 2020" announced by the Bank of Korea on the 4th, South Korea's foreign exchange reserves at the end of last month were $409.17 billion, down $480 million from the previous month ($409.65 billion).

This is the first monthly decrease in foreign exchange reserves compared to the previous month since August last year (-$1.62905 billion), marking a six-month interval.

The main factor was the strong performance of the US dollar last month. The dollar index, composed of the currencies of six major countries, recorded 98.51 at the end of February, up 0.6% from 97.87 at the end of January. As the dollar strengthened, the euro depreciated by 0.3%, the pound by 1.5%, the yen by 0.6%, and the Australian dollar by 2.1% against the dollar during February.

By asset type, securities accounted for 90.7% at $371.22 billion, followed by deposits at $27.1 billion (6.6%), gold at $4.79 billion (1.2%), International Monetary Fund (IMF) Special Drawing Rights (SDR) at $3.27 billion (0.8%), and IMF positions at $2.79 billion (0.7%).

As of the end of January this year, South Korea's foreign exchange reserves ranked 9th in the world at $409.7 billion. China was first with $3.1155 trillion, Japan second with $1.3423 trillion, and Switzerland third with $850.1 billion.

This content was produced with the assistance of AI translation services.