May Foreign Exchange Reserves Reach $456.5 Billion, Another Record High... Surpassing Saudi Arabia to Rank 8th

Bank of Korea 'Foreign Exchange Reserves at the End of May 2021'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] South Korea's foreign exchange reserves increased by $4.15 billion in one month, setting a new all-time high again. This was due to the rise in foreign currency asset management income amid the weakening of the US dollar. The size of the foreign exchange reserves rose one rank from 9th to 8th in the world.

According to the 'Foreign Exchange Reserves as of the End of May 2021' announced by the Bank of Korea on the 3rd, South Korea's foreign exchange reserves at the end of May amounted to $456.46 billion, an increase of $4.15 billion from the end of the previous month ($452.31 billion). This marked a record high for two consecutive months following April.

This is due to the increase in the US dollar conversion amount of foreign currency assets denominated in other currencies amid the weakening of the US dollar, as well as the rise in foreign currency asset management income. In fact, the US dollar index against the six major currencies stood at 90.03 at the end of May, down 0.6%.

By asset type, securities such as government bonds, government agency bonds, corporate bonds, and asset-backed securities accounted for $414.05 billion, representing 90.7% of the total. Deposits accounted for $29.44 billion (6.4%), gold for $4.79 billion (1.1%), and the IMF position, which is the drawing rights of exchangeable currency with the IMF, accounted for $4.64 billion (1.0%). Additionally, the IMF's Special Drawing Rights (SDR) amounted to $3.54 billion (0.8%).

Meanwhile, as of the end of April this year, South Korea's foreign exchange reserves ranked 8th in the world, rising one notch again. At the end of February this year, South Korea had also surpassed Saudi Arabia to rise to 8th place for the first time in about two years, but dropped back to 9th place in March.

A Bank of Korea official explained, "The difference in the size of foreign exchange reserves with Saudi Arabia ($440.6 billion) is about $10 billion, so the ranking could change again," adding, "Due to the prolonged COVID-19 pandemic, Saudi Arabia's oil production has decreased and it has faced a decline in international oil prices, which has continuously reduced its foreign exchange reserves."

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