Foreign Exchange Reserves in July Reach $416.5 Billion... 'All-Time High'

'Status of Foreign Exchange Reserves as of Late July 2020'

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] According to the 'Foreign Exchange Reserves as of the End of July 2020' announced by the Bank of Korea on the 4th, foreign exchange reserves stood at 416.53 billion dollars as of the end of July, an increase of 5.77 billion dollars compared to the end of the previous month.

A Bank of Korea official explained, "This was due to earnings from foreign currency asset management and the depreciation of the US dollar, which increased the dollar value of foreign currency assets denominated in other currencies."

The Bank of Korea applies the won-dollar exchange rate at the end of each month to convert other foreign currency assets into US dollars when calculating the size of foreign exchange reserves. Generally, when the dollar weakens, the value of other foreign currency assets increases, and when the dollar strengthens, the value of other foreign currency assets decreases.

Foreign exchange reserves showed a declining trend until March due to the impact of COVID-19 but rebounded in April. The details are as follows: 409.65 billion dollars in January, 409.17 billion dollars in February, 400.21 billion dollars in March, and 403.98 billion dollars in April.

In particular, in March, the foreign exchange authorities implemented market stabilization measures, causing foreign exchange reserves to sharply decrease by 8.96 billion dollars. However, as the market stabilized afterward, foreign exchange reserves increased consecutively.

Looking at the composition of assets, securities, which account for 91.1% of foreign exchange reserves, amounted to 379.38 billion dollars, an increase of 0.79 billion dollars compared to the previous month. The IMF position, which is the drawing right of exchangeable currency with the International Monetary Fund (IMF), was 4.37 billion dollars, up 0.12 billion dollars. Special Drawing Rights (SDR) amounted to 3.13 billion dollars, and gold holdings were 4.79 billion dollars, showing no change from the previous month. On the other hand, deposits decreased by 1.18 billion dollars to 24.86 billion dollars.

Meanwhile, as of the end of June, South Korea's foreign exchange reserves (410.8 billion dollars) ranked 9th in the world. China (3.1123 trillion dollars) had the largest reserves, followed by Japan (1.3832 trillion dollars) and Switzerland (961.8 billion dollars).

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