Foreign Currency Deposits by Domestic Residents Down to $5.78 Billion... Decrease After 4 Months

Yen Decreases by $300 Million, US Dollar Drops by $5.39 Billion

Last month, foreign currency deposits held by residents in South Korea decreased for the first time in four months, mainly due to declines in dollar and corporate deposits.

According to the "January Resident Foreign Currency Deposit Trends" report released by the Bank of Korea on the 23rd, foreign currency deposits held by residents at foreign exchange banks stood at $98.1 billion at the end of January, down $5.78 billion from the end of the previous month.

Resident foreign currency deposits refer to foreign currency deposits held domestically by 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 three consecutive months last year: $94.3 billion in October, $101.76 billion in November, and $103.88 billion in December.

By currency, dollar deposits decreased by $5.39 billion from the previous month as the expectation of further increases in the won-dollar exchange rate weakened, reducing corporate incentives to secure dollars. The won-dollar exchange rate rose at the beginning of the year but declined after mid-January.

Yen deposits also decreased by $300 million from the previous month due to depreciation of the yen, which lowered the amount when converted to U.S. dollars.

On the other hand, euro deposits increased by $90 million due to temporary deposits of import payment funds by some companies.

Lee Jong-chan, head of the Capital Movement Analysis Team at the Bank of Korea, explained, "As exchange rate volatility decreased compared to the beginning of the year, companies' incentives to secure foreign currency, mainly dollars, diminished."

By depositor type, corporate deposits stood at $82.87 billion, down $5.39 billion from the previous month, while individual deposits were $15.23 billion, down $390 million from the previous month.

By bank type, domestic banks held $86.56 billion, down $5.2 billion from the previous month, and foreign bank branches held $11.54 billion, down $580 million from the previous month.

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