Banks’ foreign exchange deposits rise in first half

Korean banks’ foreign currency deposits rose in the first half on solid exports and prospects that the local currency’s sharp ascent may ease soon, industry data showed Wednesday.

Foreign currency-denominated deposits at five major banks amounted to $14.56 billion as of end-June, up $2.27 billion from the end of last year, according to industry data.

The rise came even as the local currency appreciated 6.28 percent to the dollar in the January-June period.

Market watchers said foreign currency deposits increased mainly because solid exports have led to deeper corporate coffers and depositors have been delaying withdrawals on belief that the won’s sharp gain would lose steam in the near term.

Meanwhile, bank foreign currency loans continued to decline in the first half due mainly to tightened loan standards, they said.Foreign currency loans extended by the banks reached $14.98 billion as of the end of last month, down $386 million from the end of last year, industry data showed.

Since July last year, local banks and financial firms have been barred from extending foreign currency loans if borrowers use the money for domestic capital investment. The move came in a bid to ease the volatility of capital flows and the local currency. 

(Yonhap News)