South Korea’s foreign reserves decreased in December for the first time in seven months, as reported by the central bank. The reserves stood at $428.05 billion by the end of December, down $2.6 billion from the previous month. This decline followed a period of increased volatility in the foreign exchange market, leading authorities to implement measures for market stabilization.
The drop in foreign reserves in December marked the first monthly decrease since June. Prior to this decline, the reserves had been on the rise for six consecutive months, reaching their highest level since August 2022 at the end of November. An official from the Bank of Korea attributed the decrease to measures aimed at reducing volatility in the foreign exchange market.
The local currency in South Korea weakened against the U.S. dollar, falling below the significant 1,450 won level in November for the first time since April. Authorities responded by intervening verbally and taking actions to support the currency. By the end of December, the won was quoted at 1,439.0 per dollar on the final trading day of the year, showing a decrease from the previous session.
Foreign securities, including U.S. Treasuries, decreased by $8.22 billion to $371.12 billion at the end of December, constituting 86.7 percent of the total foreign reserves. On the other hand, the value of foreign currency deposits increased by $5.44 billion to $31.87 billion, while special drawing rights (SDRs) saw a slight rise of $150 million to $15.89 billion. Gold bullion holdings remained steady at $4.79 billion.
The country’s reserve positions with the International Monetary Fund (IMF) grew by $20 million from the previous month to $4.37 billion at the end of December. South Korea was ranked as the ninth-largest holder of foreign reserves globally by the end of November, with China leading the list, followed by Japan, Switzerland, Russia, and India.
