South Korea's foreign reserves fall by $880M in May

June 4 (Asia Today) -- South Korea's foreign exchange reserves fell by nearly $900 million in May, reversing course after a month of growth as authorities took steps to respond to a high exchange rate.

The Bank of Korea said Wednesday that the country's foreign reserves stood at $426.99 billion at the end of May, or about 654 trillion won, down $880 million from $427.88 billion at the end of April.

The central bank said the decline was mainly due to market stabilization measures, including a foreign exchange swap with the National Pension Service.

Under the arrangement, the Bank of Korea directly lends dollars to the pension fund as part of efforts to reduce pressure on the foreign exchange market and curb sharp increases in the won-dollar exchange rate.

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By asset type, securities fell by $3.39 billion from the previous month to $380.68 billion. Deposits rose by $2.59 billion to $21.35 billion.

Special drawing rights at the International Monetary Fund fell by $30 million to $15.78 billion, while South Korea's IMF position declined by $60 million to $4.4 billion. Gold holdings remained unchanged at $4.79 billion.

Major currency movements were mixed in May. The U.S. dollar index rose 0.1%, from 98.96 at the end of April to 99.02 at the end of May. The euro and British pound depreciated 0.2% and 0.3%, respectively, against the dollar, while the Japanese yen and Australian dollar appreciated 0.7% and 0.6%.

South Korea maintained the world's 12th-largest foreign exchange reserves as of the end of April.

China held the largest reserves at $3.4105 trillion, followed by Japan with $1.383 trillion, Switzerland with $1.0823 trillion, Russia with $758.7 billion, India with $690.7 billion, Taiwan with $602.5 billion, Germany with $599.2 billion, Saudi Arabia with $494.8 billion, Italy with $456.1 billion, France with $449.4 billion and Hong Kong with $442.1 billion.

-- Reported by Asia Today; translated by UPI

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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260604010001234