September Foreign Exchange Reserves Fall $1.72 Billion to $440.56 Billion, Ending Growth Streak

[Financial News]  South Korea's foreign exchange reserves fell by more than $1.7 billion last month. The decline was attributed to a drop in foreign-currency deposits held by financial institutions and the entrustment of assets to the Korea-U.S. Strategic Investment Corporation for investment in the United States.
According to the BOK on October 6, South Korea's foreign exchange reserves stood at $440.56 billion at the end of September, down $1.72 billion from $442.28 billion at the end of the previous month.
Foreign exchange reserves had risen for three consecutive months from June through August, but turned downward in September.
The BOK explained, "Foreign exchange reserves declined as a drop in foreign-currency deposits held with domestic banks coincided with the entrustment of assets to the Korea-U.S. Strategic Investment Corporation and a decrease in the U.S. dollar-converted value of foreign-currency assets other than dollars."
The U.S. dollar strengthened in September. The U.S. Dollar Index (DXY), which measures the value of the U.S. dollar against the currencies of six major economies, rose 1.7% from the previous month to 101.37. As a result, major currencies including the euro (-2.1%), pound sterling (-2.3%), and Australian dollar (-2.4%) all weakened against the dollar.
Assets comprising the foreign exchange reserves generally posted modest declines.
Securities, including government bonds, government agency bonds, and corporate bonds, fell to $386.03 billion. However, their share of total foreign exchange reserves edged up to 87.6%.
Deposits fell by $350 million from the previous month to $29.95 billion, accounting for 6.8% of total foreign exchange reserves.
The International Monetary Fund's (IMF) Special Drawing Rights (SDRs) stood at $15.48 billion, or 3.5%. The IMF position, or claims held through contributions to or loans provided to the IMF, stood at $4.3 billion, or 1.0%.
Gold holdings remained at $4.79 billion, or 1.1%, based on their book value at the time of purchase.
[email protected] Jung Sang-gyun Reporter