Synopsis
In February, South Korea witnessed a decline in foreign currency deposits for the first time in three months, attributed to the strengthening of the US dollar. The total deposits reached $98.53 billion, down $4.91 billion from January, as reported by the Bank of Korea.Key Takeaways
- First decline in foreign currency deposits in three months.
- Deposits totaled $98.53 billion at end of February.
- Corporate and individual deposits decreased significantly.
- Dollar-denominated deposits fell by $3.79 billion.
- The Korean won weakened against the US dollar.
Seoul, March 31 (NationPress) Foreign currency deposits experienced a decline for the first time in three months during February, coinciding with the strengthening of the US dollar, as reported by the central bank on Monday.
As of the end of February, the total amount of foreign currency-denominated deposits held by residents reached US$98.53 billion, reflecting a decrease of $4.91 billion compared to the previous month, according to data from the Bank of Korea (BOK).
This decline marked the first since November, as companies had accumulated more dollar reserves in December and January due to increased uncertainties both domestically and internationally, as stated by the Yonhap news agency.
The term 'residents' includes local citizens, foreigners who have resided in South Korea for over six months, and foreign enterprises. Interbank foreign currency deposits are not included in this data.
The BOK noted, "The reduction in foreign currency deposits was linked to the rise in the wonder-dollar exchange rate, which made conversion to the Korean currency more appealing."
At the end of February, the Korean won was trading at 1,463.4 won per dollar, a decrease from the previous month's rate of 1,452.7 won.
The local currency has consistently remained above the significant 1,450 won threshold against the greenback since late last year, influenced by a robust dollar and political uncertainties arising from the now-suspended President Yoon Suk Yeol's surprising martial law declaration in December.
As of the end of February, corporate deposits totaled $84.62 billion, down by $4.58 billion from the prior month, while individual deposits fell by $330 million to $13.91 billion, as reported.
In terms of currency, dollar-denominated deposits saw a drop of $3.79 billion to $84.52 billion, while Japanese yen-denominated deposits decreased by $530 million to $7.76 billion. Euro-denominated deposits also fell by $290 million to $4.16 billion, the data indicated.
