Foreign Currency Deposits Decrease After 7 Months Amid COVID-19 Impact

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Foreign currency deposits, which had been increasing due to the impact of the novel coronavirus infection (COVID-19), decreased for the first time in seven months.

According to the Bank of Korea's 'Resident Foreign Currency Deposit Trends in September' on the 22nd, as of the end of last month, the balance of resident foreign currency deposits at foreign exchange banks was $85.45 billion, down $3.09 billion from the previous month.

Resident foreign currency deposits refer to foreign currency deposits held domestically by residents, including Korean nationals, domestic companies, foreigners residing in Korea for more than six months, and foreign companies operating in Korea.

Foreign currency deposits had increased for six consecutive months from March to August, especially breaking records for three consecutive months since June, but the upward trend slowed in September.

By entity, corporate deposits (US$67.53 billion) decreased by US$3.46 billion in one month. This was due to some companies' demand for settlement funds and securities firms' overseas fund deposits, which led to a withdrawal of corporate dollar deposits. On the other hand, individual deposits increased by US$370 million to US$17.92 billion. This was influenced by continued dollar buying demand mainly from individual investors amid the decline in the won-dollar exchange rate.

By currency, dollar deposits decreased by US$3.12 billion to US$73.47 billion, and euro deposits decreased by US$290 million to US$3.86 billion. Deposits in yen (US$4.95 billion) and yuan (US$1.63 billion) increased by US$190 million and US$140 million, respectively.

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