Synopsis
In January, South Korea saw a continued rise in foreign currency deposits, reaching $103.44 billion. This increase reflects companies' efforts to secure more dollar holdings amidst ongoing uncertainties, including political unrest and international trade issues.Key Takeaways
- Foreign currency deposits increased for the second month in January.
- Total outstanding deposits reached $103.44 billion.
- Companies are securing funds for imports and investments.
- The Korean won depreciated by 10% year-over-year.
- BOK Governor Rhee will attend BIS meetings in South Africa.
Seoul, Feb 24 (NationPress) Foreign currency deposits have seen an uptick for the second month in a row during January, as businesses bolstered their dollar reserves in light of increased uncertainties, according to a report from the central bank on Monday.
As of the end of January, the total outstanding deposits in foreign currency held by residents reached $103.44 billion, reflecting a rise of $2.14 billion from the previous month, as per data provided by the Bank of Korea (BOK).
This marks the second consecutive month of growth, following December's first monthly increase in three months, reported the Yonhap news agency.
Residents include South Korean citizens, foreigners residing in South Korea for over six months, and foreign enterprises. Notably, interbank foreign currency deposits are not included in this data.
The increase is attributed to companies accumulating more funds for import transactions, investments, and other activities while dealing with uncertainties both domestically and internationally, as indicated by officials.
South Korea has been facing political turmoil after President Yoon Suk Yeol made a surprising declaration of martial law on Dec. 3, 2024. Additionally, the nation is preparing for the repercussions of U.S. President Donald Trump's new tariff policies and other protectionist actions.
As of the end of January, corporate deposits amounted to $89.2 billion, rising by $2.08 billion from the prior month, while individual deposits increased by $60 million to reach $14.24 billion.
In terms of currency, deposits denominated in dollars increased by $1.88 billion to $88.31 billion, Japanese yen deposits rose by $110 million to $8.29 billion, and euro deposits climbed by $80 million to $4.45 billion.
The value of the Korean won dropped to 1,455.79 won per U.S. dollar in January, compared to the 1,434.42 won from the previous month, marking a 10 percent decline year-over-year.
Additionally, BOK Governor Rhee Chang-yong is scheduled to travel to Cape Town, South Africa this week for meetings with central bank governors from Bank of International Settlements (BIS) member countries, his office announced on Monday.
During his week-long visit starting Tuesday, Rhee will engage with his counterparts from BIS member nations to discuss the global economy and financial conditions through the Meeting of Governors, the Asian Consultative Council, and other sessions, according to the BOK.
As the chair of the BIS' Committee on the Global Financial System, Rhee will oversee a session focusing on crucial global financial issues, it added.
