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South Korea's Foreign Currency Deposits Drop for 2nd Month in February

Foreign currency deposits in South Korea declined for the second consecutive month in February, dropping by $490 million to $117.53 billion. The decrease was driven by falls in both corporate and individual holdings. By currency, U.S. dollar and Japanese yen deposits fell, while euro-denominated deposits increased. Meanwhile, Budget Minister nominee Park Hong-keun emphasized the need for a supplementary budget to address energy supply stability amid the Middle East crisis.

Key Points: S. Korea Foreign Currency Deposits Fall for 2nd Month

  • Deposits fell for second straight month
  • Corporate holdings declined $450 million
  • Dollar and Yen deposits decreased
  • Euro-denominated deposits rose
  • Budget nominee calls for energy stability measures
2 min read

Foreign currency deposits in S. Korea fall for 2nd month in Feb

Foreign currency deposits in South Korea fell in Feb due to declines in corporate and individual holdings. Euro deposits rose while dollar and yen fell.

"a supplementary budget is inevitable given the uncertainties - Park Hong-keun"

Seoul, March 23

Foreign currency deposits in South Korea fell for the second straight month in February, due to a decline in both individual and corporate deposits, central bank data showed on Monday.

Outstanding foreign currency-denominated deposits held by residents stood at US$117.53 billion at the end of February, down $490 million from a month earlier, according to the data from the Bank of Korea (BOK), reports Yonhap news agency.

In January, foreign currency deposits fell for the first time since the first on-month decline in 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 $450 million in February from a month earlier to $100.23 billion, and individual holdings declined $40 million to $17.31 billion.

By currency, U.S. dollar-denominated deposits decreased $340 million to $96 billion, and Japanese yen deposits declined $210 million to $9.3 billion.

In contrast, euro-denominated deposits rose $200 million to $9.59 billion, while Chinese yuan deposits slipped $150 million to $1.23 billion, the data showed.

Meanwhile, Budget Minister nominee Park Hong-keun said on Monday a proposed supplementary budget bill should include measures to stabilise energy supplies, including oil reserves, amid the ongoing crisis in the Middle East.

"Although a fuel price cap is currently in place, a supplementary budget is inevitable given the uncertainties, as it is difficult to predict how long the Middle East situation will continue," Park said during a parliamentary confirmation hearing.

Amid rising global oil prices, the government adopted a price cap system on products oil refineries supply to gas stations, to help ease cost burdens related to soaring fuel prices in light of supply concerns due to the conflict.

The minister said the extra budget should include efforts to secure key items for future supply chain stability and diversify supply routes, including the stockpiling of oil.

- IANS

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Reader Comments

R
Rohit P
The part about the minister wanting to stockpile oil is the real story here. Global instability is forcing every country to think about energy security. India is doing the same, trying to diversify away from Middle East dependence. Smart move by S. Korea to plan a supplementary budget for this.
A
Aman W
$117 billion in foreign deposits is still a huge amount! Even with a small decline, their economy seems robust. The won weakening earlier probably helped exports but hurt deposits. It's a balancing act every central bank faces. RBI has its hands full too. 📉
S
Sarah B
As someone working in finance, the data is quite technical but telling. The decline in both corporate and individual holdings suggests broader caution. The rise in euro deposits is the only bright spot. It reflects the uncertainty in global markets right now, which is affecting us all.
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Vikram M
The article jumps from deposits to oil reserves. While both are important, it feels a bit disjointed. Maybe the core issue is overall economic uncertainty driving both trends. Still, good to see central banks being transparent with data. Hope our Indian media reports such BOK-type data as clearly.
K
Karthik V
China's yuan deposits also slipped. Interesting. With all the talk of de-dollarization, you'd expect the yuan to be more stable. Shows that in times of crisis, traditional safe havens or regional currencies (like the euro for them) still hold more trust. A lesson for our regional economic plans.

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