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FX deposits hit 4-month high in April amid volatility

Finance 12:00 May 20, 2020

SEOUL, May 20 (Yonhap) -- Foreign currency deposits at banks in South Korea reached a four-month high in April, central bank data showed Wednesday, amid market fluctuations caused by the new coronavirus outbreak.

Foreign currency deposits here came to US$78.18 billion as of end-April, up $2.89 billion from a month earlier, according to the data from the Bank of Korea (BOK).

In the undated file photo, a bank official checks U.S. banknotes for counterfeits at a bank in Seoul. (Yonhap)

The reading marks the highest since $79.94 billion tallied at end-December. The monthly increase, however, marks a sharp slowdown from a $6.78 billion spike posted in March.

Foreign currency deposits have been on a steady rise since February, shortly after South Korea reported its first confirmed case of COVID-19 on Jan. 20.

The $6.78 billion on-month increase in March marked the largest monthly increase since November 2018.

Such a jump came amid increased fluctuations in the won-dollar exchange rate, whose daily fluctuations jumped to an average of 13.8 won in March, compared with 5.1 won the month before.

The slowdown in the rise of FX deposits last month apparently came on market stabilization steps taken by the South Korean central bank, which included large injections of U.S. dollars.

The daily average range of fluctuation dropped to 5.6 won in April, the BOK said earlier.

The BOK has supplied over $18 billion in U.S. banknotes to local banks under a bilateral currency swap arrangement with the U.S. Fed that was signed in March to help ease market fluctuations here.

In April, FX deposits in U.S. dollars came to $68 billion, up $3.54 billion from a month earlier, while savings held in Japanese yen dropped $190 million to $4 billion.

Foreign currency deposits held by companies came to $61.98 billion as of end-April, up $2.63 billion from a month before. Those held by individuals added $260 million to $2.63 billion over the cited period.

bdk@yna.co.kr
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