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(LEAD) Korea's FX reserves dip US$8.9 bln in March, sharpest drop in over decade

All News 08:43 April 03, 2020

(ATTN: RECASTS headline, lead paras to highlight drop in March marks the fastest decline since 2009)

SEOUL, April 3 (Yonhap) -- South Korea's foreign exchange (FX) reserves dropped by the most in over a decade in March, due mainly to the strengthening of the U.S. greenback and its intervention in the currency market, central bank data showed Friday.

The country's FX reserves came to US$400.21 billion at the end of last month, down $8.96 billion from a month earlier, according to the Bank of Korea (BOK).

It marks the fastest on-month drop in South Korea's foreign reserves since November 2008.

Still, the drop was largely attributed to the advance of the U.S. dollar that led to a cut in the U.S. dollar value of other foreign currency-denominated assets.

The BOK also said part of its foreign currency holdings may have been used to help stabilize the local market.

"The drop in FX reserves is the result of market stabilization steps and the cut in the dollar value of foreign assets held in other currencies due to the advance of the U.S. dollar," it said.

(LEAD) Korea's FX reserves dip US$8.9 bln in March, sharpest drop in over decade - 1

The South Korean won also greatly fluctuated against the dollar, apparently forcing the BOK to conduct market stabilization operations using its own FX holdings.

The BOK has signed a $60 billion bilateral currency swap arrangement with the U.S. Federal Reserve. It delivered $8.7 billion to local lenders this week, using its currency swap line with the United States.

In March, South Korea's FX reserves in foreign securities came to $357.6 billion, down $13.62 billion from a month before.

Its foreign savings gained $4.62 billion to $31.72 billion over the cited period, while its special drawing rights gained $40 million to $3.32 billion.

Foreign exchange reserves include the International Monetary Fund reserve position and gold bullion, which remained nearly unchanged from the previous month at $2.78 billion and $4.79 billion, respectively, as of end-March.

South Korea's FX reserves are the world's ninth largest.

bdk@yna.co.kr
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