S. Korea's FX reserves in January fall for first time in 10 months

A seven-month-long record-setting streak was snapped in South Korean foreign exchange reserves that fell for the first time in 10 months in January due to strengthening of the U.S. dollar after the launch of new U.S. presidency, data showed.

The country’s forex reserves stood at $442.73 billion as of late January, falling $370 million on month after gaining for the past nine months, the Bank of Korea said Wednesday.

The central bank said the decline in forex coffers was attributed to the decreased value of non-dollar-denominated foreign assets due to the strengthening in the greenback. The dollar index against a basket of major six currencies gained 0.9 percent on month to 90.46 as of the end of January.

Securities, which make up the bulk of the total FX reserves, dropped by $5.27 billion to $404.57 billion from a month earlier for the first time in four months. Foreign deposits added $4.71 billion to $24.99 billion and the special drawing rights $190 million to $3.56 billion. The gold bullion holdings were unchanged at $4.79 billion and the reserve position in the International Monetary Fund was down $10 million to $4.81 billion.

“The forex reserves in foreign securities and foreign savings are complementary to each other. A portion of the reduced reserves in foreign securities may have moved to foreign savings,” a BOK official said.

Korea retained its position as the world’s ninth-largest holder of FX reserves with a total of $443.1 at the end of 2020, with China topping the list, followed by Japan and Switzerland.

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