South Korea’s foreign reserves decreased for the second month in a row in January as part of efforts to stabilize the foreign exchange market, according to the central bank. The country, ranked ninth globally in foreign reserves as of December, reported reserves of $425.91 billion by the end of January, a $2.15 billion drop from the previous month. This decline, the second consecutive monthly decrease, was attributed to measures like foreign exchange swaps with the National Pension Service.
South Korea’s local currency had been struggling around 1,450 won per dollar before dropping to below 1,480 won in late December due to various factors including dollar strength and geopolitical risks. In response, authorities issued warnings and implemented policies, such as extending a currency swap arrangement with the National Pension Service. Foreign securities, mainly U.S. Treasuries, increased to $377.52 billion by the end of January, constituting 88.6% of the total foreign reserves.
The value of foreign currency deposits fell to $23.32 billion, while special drawing rights (SDRs) remained at $15.89 billion. Gold bullion holdings were steady at $4.79 billion. Additionally, the country’s reserve position with the International Monetary Fund (IMF) rose to $4.3 billion by the end of January, up $10 million from the previous month.
