"Yuan Dividend Withdrawals" Lead to First Decline in Resident Foreign Currency Deposits in Three Months

Resident Foreign Currency Deposits Down by $1.29 Billion in July
Driven by Declines in Yuan and Corporate Deposits

Resident foreign currency deposits decreased for the first time in three months. This was due to the withdrawal of yuan-denominated dividends and the execution of overseas dollar investments by pension funds.

Yonhap News

According to the "Trends in Resident Foreign Currency Deposits for July 2025" released by the Bank of Korea on August 27, resident foreign currency deposits at foreign exchange banks stood at 105.15 billion dollars at the end of last month, a decrease of 1.29 billion dollars compared to the end of the previous month.

Resident foreign currency deposits include deposits held in South Korea by domestic individuals and companies, foreigners who have resided in Korea for more than six months, and foreign companies operating in Korea. After starting to decline in February this year and falling for three consecutive months, resident foreign currency deposits rebounded in May and June but decreased again in July.

By currency, yuan-denominated deposits fell sharply by 890 million dollars to 1.19 billion dollars at the end of the month. A Bank of Korea official explained, "Yuan-denominated deposits declined due to the withdrawal of dividends received by some companies from their overseas subsidiaries, as well as payments for current transactions." Dollar-denominated deposits, which account for the largest share, decreased by 420 million dollars to 88.72 billion dollars compared to the previous month. Euro-denominated deposits dropped by 140 million dollars to 5.07 billion dollars. The decrease in dollar-denominated deposits was attributed to the execution of overseas investments by pension funds, while the decline in euro-denominated deposits was due to payments for current transactions by some companies.

By depositor, corporate deposits decreased by 1.25 billion dollars to 90.42 billion dollars. Individual deposits fell by 40 million dollars to 14.73 billion dollars. By bank, deposits at domestic banks dropped by 2.69 billion dollars to 89.29 billion dollars, while deposits at foreign bank branches increased by 1.4 billion dollars to 15.86 billion dollars.

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