NewKerala.com

South Korea's Foreign Currency Deposits Drop First Time in 3 Months

Foreign currency deposits in South Korea declined in January for the first time in three months, primarily due to a decrease in corporate holdings. While individual deposits increased, the overall drop was driven by significant falls in euro-denominated deposits. The data coincides with a rebound in the South Korean won from its multi-year low against the U.S. dollar. Separately, the Bank of Korea reported that overall bank lending rates continued to rise for the third consecutive month in January.

Key Points: South Korea Foreign Currency Deposits Fall in January: BOK Data

  • Corporate deposits fell $1.82 billion
  • Individual deposits rose $420 million
  • Euro deposits dropped sharply by $2.36 billion
  • Bank lending rates rose for third straight month
2 min read

Foreign currency deposits fall for 1st time in 3 months in Jan: BOK

Foreign currency deposits in South Korea fell in January as corporate holdings declined. Euro and yuan deposits dropped while dollar and yen rose.

"It marked the first on-month decline since October - Bank of Korea data"

Seoul, Feb 27

Foreign currency deposits in South Korea fell for the first time in three months in January, due to a decline in corporate deposits, central bank data showed on Friday.

Outstanding foreign currency-denominated deposits held by residents stood at US$118.03 billion at the end of January, down $1.4 billion from a month earlier, according to the data from the Bank of Korea (BOK), reports Yonhap news agency.

It marked the first on-month decline since October, following gains in November and December that had lifted the figure to a record high amid a weakened won and heightened foreign exchange market volatility.

Residents include South Korean citizens, foreigners who have lived in the country for more than six months and foreign companies. The data excludes interbank deposits.

Corporate foreign currency deposits fell $1.82 billion from a month earlier to $100.06 billion, while individual holdings rose $420 million to $17.35 billion.

By currency, U.S. dollar-denominated deposits increased $400 million to $96.34 billion, and Japanese yen deposits gained $520 million to $9.51 billion.

In contrast, euro-denominated deposits dropped $2.36 billion to $9.39 billion, while Chinese yuan deposits slipped $70 million to $1.38 billion, the data showed.

The local currency has rebounded from a multi-year low of nearly 1,500 won per U.S. dollar seen late last year and has been hovering around the 1,430 won level.

Amid continued volatility, the won opened at 1,432.2 per dollar on Friday, down 6.4 won from the previous session.

Meanwhile, banks' overall lending rates rose for the third consecutive month in January, driven by higher household loan rates amid tighter regulations aimed at stabilising the housing market, data showed on Friday.

The average interest rate on new bank loans stood at 4.24 percent last month, up 0.05 percentage point from December, according to the data from the Bank of Korea (BOK). The figure has increased steadily since November 2025.

The increase came as the rate on new household loans climbed 0.15 percentage point to 4.5 percent, marking a fourth consecutive monthly increase. In particular, the average rate on home-backed mortgage loans rose 0.06 percentage point to 4.29 percent.

- IANS

Share this article:

Reader Comments

P
Priya S
Corporate deposits fell but individual holdings rose. Maybe Korean citizens are moving money for better returns? Similar discussions happen here about FCNR deposits. Volatility is a global theme now. 📉
R
Rohit P
The won strengthening from 1500 to 1430 is a big move! Shows how quickly forex markets can change. Hope our rupee also finds some stability. These BOK reports are quite detailed, similar to our RBI bulletins.
S
Sarah B
As someone working in finance, the parallel rise in lending rates is the real story. Tighter regulations affecting housing loans – sounds familiar. Many countries are walking this tightrope between growth and stability.
V
Vikram M
The data is clear but I wish the article gave more context on *why* corporate deposits fell so sharply. Was it seasonal, or a strategic shift? Without that, it's just numbers. Still, useful to see how other central banks report things.
K
Kavya N
Even the Chinese yuan deposits slipped a bit. Global economic uncertainty is making everyone cautious with their foreign currency holdings. Stay safe with your investments, people! 🙏

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50