S. Korea’s FX reserves hit record high amid weak US dollar

South Korea’s foreign exchange reserves reached a new high last month, mostly due to the impact of the weakening US dollar, central bank showed Tuesday.

As of end-October, the country’s forex reserves stood at $406.32 billion, up $3 billion from a month earlier, according to the Bank of Korea.

“The increase is largely due to the profits from forex assets and dollar-equivalent forex reserves held in other currencies as the US dollar has weakened,” the BOK said.

Last month, the greenback dropped 5 percent against the British pound and 1.9 percent against the euro.

Forex reserves held in overseas securities, including state and corporate bonds, accounted for 92 percent of the total at $378.8 billion, down $700 million on-month.

With the latest figure, Seoul retained its position of holding the ninth-largest forex reserves in the world. Topping the list was China with $3.92 trillion, followed by Japan with $1.32 billion.

Other than securities, which accounted for 92 percent with $373.8 billion in October, the total forex reserves also included deposits, gold bullion, special drawing rights and reserve tranche position of the International Monetary Fund.

The SDR is an international reserve asset created by the IMF to supplement its member states’ reserves, while the RTP is portion of the required quota of currency that each member state should provide to the multilateral agency and can be utilized without a service fee.

While the gold reserve level was stagnant at $4.79 billion, accounting for 1.2 percent of the total, SDR climbed $10 million on-month to $3.37 billion and the RTP rose $30 million to $2.67 billion in October.

By Bae Hyun-jung (tellme@heraldcorp.com)