South Korea's foreign reserves expand in December on dollar's descent

South Korea's foreign reserves continued to expand for the second straight month in December as the weakening dollar resulted in a rise in the converted value of holdings denominated in other currencies, central bank data showed Wednesday.

The country's foreign reserves came to $423.16 billion as of end-December, up $7.06 billion from the previous month, according to the data provided by the Bank of Korea.

The increase came as the dollar-converted value of other currency-based assets increased amid the greenback's recent descent.

The dollar weakened about 2.8 percent against major six currencies in December, the BOK said.

South Korea's foreign reserves dropped sharply until a few months earlier as foreign exchange authorities sold dollars to stem the won's excessive fall.

During the July-September period, the BOK earlier said that it sold a net $17.54 billion. The foreign reserves fell to 414.01 billion in late October.

The December reserve figure was also down from $463.12 billion held a year earlier.

Foreign reserves consist of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.

Of the total reserves, foreign securities, such as US Treasuries, were valued at $369.69 billion as of end-December, which accounted for 87.4 percent of total foreign reserves, the data showed.

The value of deposits stood at $29.35 billion, which made up 6.9 percent of the total.

South Korea was ranked the world's ninth-largest holder of foreign reserves as of the end of November, the BOK said. (Yonhap)