Foreign currency deposits fall for 1st time in 3 months in South Korea

Seoul, March 31
Foreign currency deposits fell for the first time in three months in February amid the strengthening of the US dollar, the central bank here said on Monday.



Outstanding foreign currency-denominated deposits held by residents stood at US$98.53 billion as of end-February, down $4.91 billion from a month earlier, according to data from the Bank of Korea (BOK).



It marked the first decline since November, as companies had accumulated more dollar holdings in December and January amid heightened uncertainties at home and abroad, reports Yonhap news agency.



Residents include local citizens, foreigners who have stayed in South Korea for more than six months, and foreign companies. The data excludes interbank foreign currency deposits.



"The decline in foreign currency deposits was attributed to the rise in the won-dollar exchange rate, which increased the incentive to convert to the Korean currency," the BOK said in a press release.



The Korean won weakened against the U.S. dollar, trading at 1,463.4 won per dollar at the end of February, compared with 1,452.7 won a month earlier.



The local currency has remained well above the closely watched 1,450 won level against the greenback since late last year, amid a strong dollar and political uncertainties stemming from now-suspended President Yoon Suk Yeol's shocking martial law declaration in December.



Corporate deposits stood at $84.62 billion as of end-February, down $4.58 billion from the previous month, while individual holdings declined by $330 million to $13.91 billion, said the report.



By currency, dollar-denominated deposits fell by $3.79 billion to $84.52 billion, and Japanese yen-denominated deposits decreased by $530 million to $7.76 billion, according to the report.



Euro-denominated deposits also dropped by $290 million to $4.16 billion, the data showed.