SEOUL, SOUTH KOREA / RankWire.AI / – The foreign exchange holdings of South Korea increased significantly in August, reaching a total of $442.28 billion by month’s end. The Bank of Korea announced a rise of $14.33 billion from the $427.95 billion recorded at the close of July. This figure represents the largest monthly increase since the beginning of official reserve tracking in 1971 and pushes the country’s reserves to their highest level since May 2022, marking a notable acceleration from the smaller gains seen in the previous two months.
Following the trend of the previous two months—$370 million in June and $590 million in July—South Korea’s reserves grew for a third consecutive month. The August increase also surpassed the previous monthly record of $14.29 billion, set in May 2009. Despite this substantial rise, the total reserves remain below the all-time high of $469.21 billion achieved in October 2021. These figures reflect assets within the country’s official foreign exchange reserves and are denominated in U.S. dollars.
The Bank of Korea attributed the surge in August to increased foreign currency deposits, gains from reserve asset management, and fluctuations in exchange rates. Changes in currency values can influence the dollar value of assets held in euros, pounds, and other currencies. When reporting total reserves, the central bank converts these holdings into U.S. dollars. Consequently, movements in major exchange rates can increase or decrease the reported reserve total even if the underlying foreign currency assets remain unchanged.
Securities and foreign deposits contribute to August’s record increase
Securities remained the predominant component of South Korea’s foreign exchange reserves. Their value grew by $7.07 billion in August, reaching $387.07 billion, which constitutes 87.5% of the total reserves. This category includes government and corporate securities held as part of official reserve assets. Foreign currency deposits also saw a sharp rise, increasing by $7.17 billion to $30.30 billion, significantly contributing to the overall growth alongside the securities increase.
Smaller changes were observed in other reserve components. Special drawing rights increased by $60 million to $15.77 billion, while the country’s reserve position remained approximately at $4.34 billion. Gold holdings stayed steady at $4.79 billion. In sum, securities and foreign currency deposits accounted for nearly the entire $14.33 billion monthly rise. Despite the dominance of securities, deposits experienced one of the largest component increases during August, maintaining the reserve composition’s heavy focus on securities.
Reserves hit a four-year high with August’s total
South Korea’s reserve level in August was the highest in over four years. The last time reserves exceeded this figure was in May 2022, when they reached $447.71 billion. The August figure also narrows the gap with the record level of $469.21 billion reported in October 2021. Official foreign exchange reserves include securities, deposits, gold, special drawing rights, and the country’s reserve position within the international monetary system. These figures are published monthly as part of the country’s ongoing transparency regarding external financial assets.
The latest data reflect a notable shift in the pace of reserve growth during the summer months. June and July saw modest increases, but August delivered a record monthly jump. By the end of August, South Korea’s foreign exchange reserves stood at $442.28 billion, representing an increase of nearly $14.3 billion from the previous month. While still below the all-time peak, this marks the highest level since May 2022, supported mainly by gains in securities, foreign currency deposits, and the dollar value of selected reserve assets.