As Exchange Rates Rise, Residents' Foreign Currency Deposits Decline for Third Consecutive Month Due to Profit-Taking

On the 23rd, the KOSPI and KOSDAQ started with slight gains, while the won-dollar exchange rate began with a slight decline to around 1,378 won. Stock market indices and other information are displayed on the electronic board in the dealing room at the Hana Bank headquarters in Euljiro, Seoul. Photo by Heo Younghan younghan@

As the won-dollar exchange rate rises, the number of individuals selling dollars has increased, leading to a decline in resident foreign currency deposits for the third consecutive month.

According to the "Resident Foreign Currency Deposit Trends for March 2024" released by the Bank of Korea on the 23rd, resident foreign currency deposits stood at 95.01 billion dollars at the end of last month, down 1.12 billion dollars from the previous month. Resident foreign currency deposits have been decreasing for three consecutive months since the end of last year, when they were 103.88 billion dollars.

Resident foreign currency deposits refer to the total amount of foreign currency deposits held by residents in Korea, including domestic individuals and companies, foreigners residing in Korea for more than six months, and foreign companies operating domestically.

By currency, euro deposits decreased by 700 million dollars compared to the end of the previous month, while dollar deposits and yen deposits also fell by 280 million dollars and 40 million dollars, respectively.

The Bank of Korea explained that while corporate dollar deposits slightly increased, individual deposits decreased due to profit-taking amid the rising exchange rate. The won-dollar exchange rate rose from 1,331.5 won at the end of February to 1,347.2 won at the end of March.

Dollar deposits account for 81.7% of foreign currency deposits. With increased profit-taking due to the rising exchange rate, the balance of dollar deposits has decreased for three consecutive months from January to March, leading the overall decline in foreign currency deposits.

The Bank of Korea also explained that euro and yen deposits decreased due to some companies' payments for import settlements.

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