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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, August 5 — South Korea’s foreign exchange reserves increased by USD 1.13 billion in July from the previous month, despite a stronger U.S. dollar that reduced the dollar-converted value of non-USD assets. The rise was mainly driven by new sovereign bond issuance and improved investment returns.
According to data released by the Bank of Korea (BOK) on Monday, the nation’s FX reserves stood at USD 411.33 billion as of end-July, up from USD 410.2 billion in June. This marks the second consecutive month reserves have remained above the USD 410 billion threshold, after having fallen below that level for four straight months earlier this year.
“The stronger U.S. dollar led to a decrease in the dollar-converted value of non-dollar assets,” said a BOK official. The U.S. dollar index rose 2.5% in July to 99.82, up from 97.40 in June, while the euro, pound sterling, Japanese yen, and Australian dollar depreciated by 2.7%, 3.4%, 3.3%, and 1.4%, respectively.
However, the EUR 1.4 billion in sovereign bonds (foreign exchange equalization bonds) issued on June 26 were settled in July, contributing to the rise in reserves. Higher investment income also played a role.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
