Korea`s foreign reserves rise to US$201.7 bln in Jan.

SEOUL, Feb. 3 (Yonhap) -- South Korea's foreign exchange reserves rose for the
second straight month in January as investment profits gained and local banks'
overseas funding squeeze eased, the central bank said Tuesday.
The nation's foreign reserves totaled US$201.74 billion as of the end of January,
up $520 million from a month earlier, according to the Bank of Korea (BOK).
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 foreign reserves advanced in December for the first time in nine
months as a weaker U.S. dollar boosted the dollar value of assets in other
currencies.
"Despite a fall in the dollar conversion value of non-dollar assets, foreign
reserves rose last month as investment profits advanced and local banks' overseas
funding conditions improved," said Ha Keun-cheol, an official at the BOK.
"In January, local banks redeemed part of maturing dollar funds provided from
foreign exchange authorities," Ha added.
Commercial banks repaid a combined $2.72 billion out of dollar liquidity, which
authorities offered to the local swap market, according to the BOK.
South Korean banks, whose overseas short-term borrowing remained at a high level,
had been suffering from dollar shortages, sparked by the collapse of the U.S.
investment bank Lehman Brothers Holdings Inc. in mid-September.
On Oct. 30, the BOK announced a $30 billion currency swap agreement with the U.S.
Federal Reserve, tapping $16.35 billion from the swap line so far.
The use of the swap facility helped ease fears about declining foreign reserves.
The Korean currency fell 25.7 percent to the dollar last year alone, becoming one
of the world's worst-performing currencies.
As of the end of December, 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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