South Korea’s foreign-exchange reserves hit record high in July

South Korea’s foreign-exchange reserves rose to a record high in July following the largest fall in 13 months in June as a weaker US dollar raised the conversion value of non-dollar assets, the central bank said Monday. The country’s foreign reserves reached US$329.71 billion as of end-July, up $3.27 billion from the previous month, according to the Bank of Korea (BOK). The FX reserves fell by $1.66 billion in June, the largest monthly decline since May 2012, due mainly to repayment of maturing currency stabilization bonds, according to South Korea’s (Yonhap) News Agency. The previous record high of the FX reserves was $328.91 billion tallied in January. 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 BOK said that the investment profit gained ground and the strength in the euro and the yen raised their dollar conversion value, boosting the reserves. Korea’s growing FX reserves and the current account surplus serve as buffers for the local financial markets as global markets remain on edge amid speculation over US stimulus tapering. Despite monthly fluctuations, the FX reserves have been on the rise, aided by the continued trade surplus and foreign capital inflows. As of the end of June, South Korea was the world’s seventh-largest holder of foreign-exchange reserves.