S. Korea`s FX reserves hit 9-month high in June

By Kim Soo-yeon
SEOUL, July 2 (Yonhap) -- South Korea's foreign exchange reserves rose to a
nine-month high in June as foreign currency liquidity conditions improved and
investment profits gained, the central bank said Thursday.
The nation's foreign reserves totaled US$231.73 billion as of the end of June, up
$4.96 billion from the previous month, according to the Bank of Korea (BOK).
They climbed to the highest level since September last year when the
corresponding figure reached $239.67 billion, the BOK added. The FX reserves rose
for the fourth straight month in June and they increased by a record $14.29
billion in May.
Foreign reserves consist of securities and deposits denominated in overseas
currencies, along with International Monetary Fund reserve positions, special
drawing rights and gold bullion.
"The country's trade surplus has gained and foreign investors continued to snap
up local stocks, making foreign currency liquidity conditions improve," Ha
Keun-cheol, an official at the BOK, told reporters.
The BOK said the reserves gained ground on the back of a mixture of favorable
factors. The government retrieved about $3 billion in maturing dollar funds that
it provided to local banks and the state-run National Pension Service repaid $430
million to the BOK as part of its currency swap arrangement with the central bank
matured.
Last year, South Korea's foreign exchange reserves declined for eighth straight
months before rebounding in December as authorities unloaded dollar holdings to
stem the won's fall and ease the deepening credit squeeze.
Since October, the BOK has provided foreign currency liquidity to cash-strapped
banks by tapping foreign exchange reserves or a $30 billion currency swap line
with the U.S. Federal Reserve.
"(If there is no external shock), the reserves are expected to be on the upward
trend for the time being," Ha added.
As of the end of May, South Korea was the world's sixth-largest holder of foreign
exchange reserves after China, Japan, Russia, Taiwan and India.
sooyeon@yna.co.kr
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