S. Korea Sees Decline in FX Reserves for Second Straight Month
Foreign currency reserves retreated 2.15 billion U.S. dollars from a month earlier to 425.91 billion dollars at the end of January, after reducing 2.60 billion dollars in the previous month, according to the Bank of Korea (BOK).
The back-to-back contraction occurred as the BOK authorized the National Pension Service (NPS) through the FX swap contract to borrow the dollar funds from the central bank's foreign reserves instead of buying them in the spot market.
The currency swap arrangement alleviated upward pressure on the South Korean won-to-dollar exchange rate by absorbing substantial dollar demand stemming from the NPS's international investment activities.
The nation's foreign reserves comprised 377.52 billion dollars of securities, 23.32 billion dollars of deposits, 15.89 billion dollars of special drawing rights, 4.79 billion dollars of gold bullion and 4.38 billion dollars of the IMF position.
The Asian economy maintained its position as the world's ninth-largest holder of foreign reserves at the end of December last year, unchanged from a month earlier.
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