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South Korea's Foreign Reserves Down In February As Value Of Non-Dollar Assets Fell

By March 6, 2017 at 5:09 am
As of end-February, South Korea had the world's eighth-largest foreign currency reserves. (Photo : Ryan Peirce/Getty Images)

South Korea's foreign currency reserves recorded a marginal decline in February after a three-month high in January, according to data from the Bank of Korea released Monday.

The country's foreign reserves stood at US$373.91 billion as of end-February, lower by $130 million from January due to a drop in the value of assets held in non-dollar currencies like the euro and the pound when converted to the dollar, the central bank said.

The US Dollar Index strengthened against other major currencies by 1.6 percent last month, pulling down a conversion value of non-dollar assets, according to a report by Xinhua News Agency.

The dollar index, which measures the greenback's value against a basket of six currencies, rose to 101.1 in February from 99.5 in January, according to a report by KBS World Radio.

The appreciation of the dollar's value relative to other majors came amid expectations that the US Federal Reserve will raise interest rates in the near future. The Fed is expected to have three rate increases later this year after its quarter a percentage point rate hike in December last year.

Comprising South Korea's foreign reserves are $338.5 billion in securities holdings, $24.96 billion in deposits and $4.79 billion in gold bullion. The reserves also include $2.92 billion of special drawing rights and $1.74 billion of positions at the IMF.

South Korea's IMF positions came at $1.74 billion as of the end of February, compared to $1.75 billion in the earlier month. Gold bullion holding remained steady at $4.79 billion during the cited period, according to a report by the Yonhap News Agency.

As of February this year, South Korea had the eighth-biggest foreign reserves in the world, unchanged from the previous two months, trailing China, Japan, Switzerland, Saudi Arabia, Taiwan, Hong Kong and Russia. 

China, the world's biggest holder of foreign reserves, had about $2.9 trillion worth of foreign reserves by end-February, which marked the first time its foreign reserves dropped below $3 trillion in six years. 

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