South Korea’s foreign reserves fall

Seoul, June 5 (IANS) South Korea’s foreign reserves fell last month as the US dollar appreciates, which was caused by expectations for the early end of quantitative easing reduced the conversion value of non-dollar assets, central bank data showed Wednesday.

Foreign reserves were $328.1 billion as of the end of May, down from $328.8 billion in the prior month, according to the Bank of Korea (BOK).

The BOK attributed the fall to a slide in the conversion value of non-dollar assets such as the European single currency and the British pound. The euro and the pound depreciated 0.4 percent and 1.7 percent each versus the dollar, and the Japanese yen declined 3.1 percent to the dollar last month, reported Xinhua.

Expectations spread over the earlier-than-expected shutdown of the bond purchasing program by the US Federal Reserve, causing the ascent of the dollar to other currencies.

As of the end of April, South Korea was the world’s seventh-largest holder of foreign reserves following China, Japan, Russia, Switzerland, Taiwan and Brazil.

The reserves in South Korea stayed above the $300 billion mark since April 2011 when it topped the level for the first time in the country’s history. The reserves hit a record high of $328.91 billion in January.

The foreign reserves consisted of $299.81 billion of securities, $17.57 billion of deposits, $4.79 billion of gold bullion, $3.41 billion of special drawing rights (SDR) and $2.51 billion of International Monetary Fund (IMF) positions.

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