South Korea’s Foreign Exchange Reserves Increase in May

The Bank of Korea announced on June 3 that South Korea’s foreign exchange reserves increased by US$3.33 billion to US$407.31 billion last month. The reserves, which showed a significant decrease in March in the wake of the spread of COVID-19, rebounded in April and continued to increase last month.

Marketable securities, which account for 89.8 percent of the reserves, increased by US$4.2 billion to US$365.71 billion whereas deposits in foreign central banks and major global banks decreased US$1.21 billion to US$30.01 billion. The IMF special drawing rights and gold reserves remained at US$2.8 billion and US$4.79 billion, respectively.

The central bank explained that an increase in its revenue from its foreign currency-denominated assets and a depreciation of the U.S. dollar that resulted in an increase in the value of its foreign currency assets converted to the U.S. dollar led to the increase in foreign exchange reserves.

As of the end of April this year, South Korea ranked ninth in the world, with US$404 billion, in terms of the size of foreign exchange reserves. China (US$3,091.5 billion) topped the list, followed by Japan (US$1,368.6 billion), Switzerland (US$887.7 billion), Russia (US$566 billion), Taiwan (US$481.8 billion), India (US$481.1 billion), Saudi Arabia (US$447.5 billion) and Hong Kong (US$441.3 billion).