"Export Boom and Overseas Investment Frenzy"... July Dollar Deposits Increase by $4.57 Billion

With continued export growth and the ongoing overseas investment boom among Seohak Gaemi, dollar deposits increased by $4.57 billion, marking the largest increase in eight months.

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According to the "Resident Foreign Currency Deposit Trends for July" released by the Bank of Korea on the 23rd, dollar deposits among resident foreign currency deposits at foreign exchange banks increased by $4.57 billion compared to the end of the previous month. This is the largest increase in eight months since November 2023 ($5.95 billion). Dollar deposits had decreased for five consecutive months from January after increasing by $1.96 billion in December last year, but have shown an increasing trend for two consecutive months since June ($1.26 billion).

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

The increase in dollar deposits was driven by temporary deposits of current account receipts and foreign bond issuance funds, as well as inflows of investor deposits at securities firms. Lee Jong-chan, head of the Capital Movement Analysis Team at the Bank of Korea's International Department, said, "Overall, exports have been strong, leading to steady inflows of current account receipts throughout the year, and as residents' interest in overseas investment grows, deposits at securities firms for investment expansion are flowing in."

He added, "Foreign bond issuance funds were deposited around the end of July, mainly by public enterprises and financial institutions. Since these funds were deposited for use in August and September, they are expected to be withdrawn afterward."

At the end of July, the total resident foreign currency deposit balance was $94.44 billion, increasing by $3.87 billion compared to the end of the previous month, mainly due to dollar deposits and corporate deposits. Resident foreign currency deposits had decreased for five consecutive months from January after increasing by $2.12 billion in December last year, but have been increasing for two consecutive months since June ($1.61 billion).

All currencies except for dollar deposits decreased. Euro deposits fell by $440 million compared to the end of the previous month due to net sales of spot foreign exchange by some companies. Yen deposits decreased by $30 million due to payments for current account transactions. Yuan deposits decreased by $170 million compared to the end of the previous month.

By deposit holder, corporate deposits stood at $79.33 billion, increasing by $3.85 billion from the previous month. Individual deposits also rose by $20 million to $15.11 billion compared to the previous month.

By bank type, domestic banks' deposit balances increased by $3.25 billion to $83.15 billion compared to the previous month. Foreign bank branches also increased by $620 million to $11.29 billion compared to the previous month.

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