"Investment Returns, Foreign Currency Deposits Rise": October FX Reserves Hit 4-Year, 5-Month High

At end-October, foreign exchange reserves stood at $443.16 billion, up $2.6 billion month over month
Driven by returns on foreign currency assets and an increase in financial institutions' foreign currency deposits
South Korea ranked ninth globally in foreign exchange reserves at end-September

Foreign exchange reserves increased last month for the first time in a month, reaching their highest level in four years and five months. The increase was driven by returns on foreign currency assets and a rise in foreign currency deposits at financial institutions.

A staff member sorts foreign currency at Hana Bank's Counterfeit Currency Response Center in Jung-gu, Seoul. Yonhap News Agency

According to the Bank of Korea on November 4, the country's foreign exchange reserves stood at $443.16 billion at the end of October, up $2.6 billion from $440.56 billion at the end of the previous month. This was the highest level since May 2022, when reserves reached $447.71 billion. Reserves rose month over month on returns from foreign currency assets and an increase in foreign currency deposits at financial institutions.

By asset type, securities, including government bonds, corporate bonds and government agency bonds, fell by $3.59 billion from the end of the previous month to $382.43 billion. Securities accounted for 86.3% of total foreign exchange reserves. By contrast, deposits (8.2%) increased by $6.32 billion to $36.27 billion. Special drawing rights (SDRs) at the International Monetary Fund (IMF) amounted to $15.41 billion (3.5%); gold, $4.79 billion (1.1%); and the IMF reserve position, $4.25 billion (1.0%).

Meanwhile, the Bank of Korea's physical gold holdings, unchanged at 104.4 metric tons since 2013, are expected to increase by about 1 metric ton by the end of this year. Once the domestic gold trading system for locally produced gold is completed next month, the Bank plans to specify the timing and scale of its purchases.

The dollar index (DXY), which measures the dollar's value against the currencies of six major economies, rose 0.7% over the month, from 101.37 at the end of September to 102.04 at the end of October. Over the same period, the euro fell 1.3% against the dollar, and the yen declined 0.2%. In contrast, the pound rose 1.2% and the Australian dollar gained 0.5%.

At the end of September, South Korea's foreign exchange reserves totaled $440.56 billion, ranking ninth in the world. The country's ranking rose two places from 11th in August. According to the Bank of Korea's Economic Statistics System (ECOS), South Korea had the world's ninth-largest foreign exchange reserves, behind China ($3.78943 trillion), Japan, Switzerland, Russia, India, Taiwan, Germany and Saudi Arabia. The ranking was also affected by some countries moving down the list after including the market value of their gold holdings in their foreign exchange reserves.

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