Korea's foreign reserves drop in May on exchange rate stabilization measures

Foreign reserves fell slightly last month amid efforts by authorities to manage exchange rate volatility, the central bank said on Thursday.

Korea's foreign reserves stood at $426.99 billion as of the end of May, down $880 million from the previous month, according to data from the Bank of Korea (BOK).

The figure had risen $4.22 billion in April, following a $3.97 billion decline in March, which was the sharpest monthly drop in about a year.

The BOK attributed the on-month decline to authorities' market stabilization measures, such as foreign exchange swaps with the National Pension Service.

The won has traded over the psychologically important level of 1,500 won against the dollar since May 15 due to prolonged Middle East tensions and net selling of local stocks by foreign investors.

Foreign securities, including U.S. Treasuries, fell by $3.39 billion from a month earlier to $380.68 billion at the end of May, accounting for 89.2 percent of the country's total foreign reserves.

The value of foreign currency deposits rose $2.59 billion to $21.35 billion, and special drawing rights rose $30 million to $15.78 billion.

Gold bullion holdings remained unchanged at $4.79 billion.

The country's reserve position with the International Monetary Fund decreased by $60 million from the previous month to $4.4 billion at the end of May, the latest findings showed.

Korea ranked as the world's 12th-largest holder of foreign reserves as of the end of April, down from 10th place a month earlier.

China topped the list, followed by Japan, Switzerland, Russia and India, according to the BOK.

Yonhap