SEOUL, SOUTH KOREA / RankWire.AI / – South Korea’s foreign exchange reserves 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 $427.95 billion at the close of July. This marked the largest monthly gain since the official reserve records began in 1971. The increase also brought the reserves to their highest level since May 2022, after smaller rises in the previous two months.
This marks the third consecutive month of reserve growth, following increases of $370 million in June and $590 million in July. August’s increase even surpassed the previous record of $14.29 billion, set in May 2009. Despite the growth, reserves are still below the record high of $469.21 billion reached in October 2021. These figures represent assets held within South Korea’s official foreign exchange reserves and are reported in U.S. dollars.
The Bank of Korea attributed the August rise to increased foreign currency deposits, returns from reserve asset management, and exchange rate movements. Fluctuations in currency values can impact the dollar amount of assets held in euros, pounds, and other currencies. When reporting, the central bank converts these holdings into U.S. dollars. Consequently, movements in major exchange rates can influence the reported reserve totals, even if the underlying foreign currency assets remain unchanged in the portfolio.
Securities and Deposits Lead August Growth
Foreign securities continued to be the largest part of South Korea’s foreign exchange reserves. Their value increased by $7.07 billion in August, reaching $387.07 billion, which accounts for 87.5% of the total reserves. This category includes government and corporate securities held within official reserve assets. Foreign currency deposits also saw a sharp rise. They went up by $7.17 billion to $30.30 billion, making up a significant portion of the overall increase along with foreign securities.
Other reserve components experienced smaller changes. Special drawing rights increased by $60 million to $15.77 billion. The country’s reserve position stood at roughly $4.34 billion. Gold holdings remained unchanged at $4.79 billion. Securities and foreign currency deposits together made up nearly all of the $14.33 billion rise for the month. The reserve composition stayed heavily weighted toward securities, even as deposits recorded one of their largest monthly increases during August.
Reserves Hit Highest Level Since May 2022
South Korea’s reserves in August reached their highest point in over four years. The last time they exceeded this level was in May 2022, when reserves hit $447.71 billion. The current figure also closes the gap with the record of $469.21 billion set in October 2021. Official foreign exchange reserves include securities, deposits, gold, special drawing rights, and the reserve position in the international monetary system. These figures are published each month as part of routine reporting on South Korea’s external financial assets.
The recent data reveal a noticeable change in the pace of reserve growth during summer. June and July saw modest increases, but August delivered a record monthly rise. South Korea’s reserves ended August at $442.28 billion, an increase of nearly $14.3 billion from the previous month. While still below the historical peak, the level is the highest since May 2022, supported by gains in securities, foreign currency deposits, and the dollar value of certain reserve assets.