South Korea’s foreign reserves fall

Seoul, July 3 (IANS) South Korea’s foreign reserves reduced last month as the government repaid foreign debts that were borrowed to stabilize the local foreign exchange market, central bank data showed Wednesday.

Foreign reserves were $326.44 billion as of the end of June, down $1.66 billion from the prior month, according to the Bank of Korea.

The reduction came after the so-called foreign exchange stabilization bonds worth $1.02 billion were repaid last month on maturity, the central bank said, noting that the bonds were issued 10 years earlier, reported Xinhua.

Such bonds are floated to raise foreign liquidity that is used for stabilizing the foreign exchange market. The central bank is responsible for issuance and management of the bonds.

A reduction in conversion value of non-dollar assets also contributed to the reserves decline. The European single currency depreciated 0.1 percent to the dollar last month, and the Australian dollar dropped 4.2 percent versus the greenback.

As of the end of May, 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.

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