South Korea’s Foreign Exchange Reserves Drop by US$9.43bn in June

The Bank of Korea announced on July 5 that South Korea’s foreign exchange reserves were US$438.28 billion at the end of June, the reserves decreased by US$9.43 billion that month, the amount of decrease is the largest since November 2008, and the reserves decreased for the fourth consecutive month in June and decreased by US$23.4 billion during the four months.

“In June, the value of the U.S. dollar rose and the dollar was sold for forex market stabilization,” the bank explained, adding, “That month, the value of USD vis-à-vis EUR rose 3.1 percent and the value rose 4.2 percent, 6.5 percent and 4.4 percent in relation to GBP, JPY and AUD, respectively.”

This month as well, the won-dollar exchange rate is at around 1,300 won per U.S. dollar, signaling an additional decrease in South Korea’s foreign exchange reserves. In addition, interest rates are likely to become higher in the United States than in South Korea this month, and then the dollar demand will become even higher.

At the end of May, China’s foreign exchange reserves totaled US$3.1278 trillion, followed by Japan (US$1.3297 trillion), Switzerland (US$1.0411 trillion) and India (US$603.2 billion). Taiwan had US$548.9 billion and South Korea was in the ninth place.