As Corporate Deposits Increase... Foreign Currency Deposits Turn to Growth After 4 Months

Published 14 Sep.2021 12:00(KST)

The Bank of Korea Announces 'Resident Foreign Currency Deposit Trends in August 2021'

As Corporate Deposits Increase... Foreign Currency Deposits Turn to Growth After 4 Months

[Asia Economy Reporter Jang Sehee] Foreign currency deposits increased for the first time in four months due to temporary deposits of export proceeds and payment funds by companies.

According to the "Resident Foreign Currency Deposit Trends for August 2021" announced by the Bank of Korea on the 14th, resident foreign currency deposits at foreign exchange banks last month amounted to $92.6 billion, an increase of $470 million from the previous month ($92.13 billion).

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

A Bank of Korea official analyzed, "Despite the rise in the exchange rate, foreign currency deposits increased," adding, "This was a temporary increase due to companies' deposits of export proceeds and payment funds." The increase in export volume was influenced by the expansion of trade transaction scale.

By currency, dollar deposits ($80.38 billion) increased by $700 million compared to the previous month. The Bank of Korea explained that the increase was mainly from corporations ($940 million) due to deposits of export proceeds and payment funds. On the other hand, personal deposits decreased by $240 million due to the impact of the rising exchange rate. The won-dollar exchange rate rose by 16 won from 1,145.1 won in July to 1,161.1 won in August.

Yen deposits ($4.94 billion) decreased by $100 million compared to the previous month.

By bank type, domestic banks increased by $220 million to $81 billion. Foreign bank branches increased by $250 million to $11.3 billion compared to the previous month.