S. Korea's FX reserves hit 10-month high in July

SEOUL, Aug. 4 (Yonhap) -- South Korea's foreign exchange reserves rose to a
10-month high in July as foreign currency liquidity conditions improved and
investment profits rose, the central bank said Tuesday.
The nation's foreign reserves totaled US$237.51 billion as of the end of July, up
$5.78 billion from the previous month and marking the fifth straight monthly
gain, 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. In the first half,
they registered the largest half-year increase of $30.51 billion.
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 current account has remained in the black and foreigners continued to buy
local stocks, leading foreign currency liquidity to improve," Ha Keun-cheol, an
official at the BOK, told reporters.
The BOK said the reserves gained ground thanks to a mixture of favorable factors.
The government retrieved about $3.5 billion in maturing dollar funds that it
provided to local banks, and the state-run National Pension Service repaid $440
million to the BOK as part of its currency swap arrangement with the central
bank.
It added investment profits gained, and a weaker U.S. dollar boosted the dollar
value of assets in other currencies.
Last year, South Korea's foreign exchange reserves declined for eight 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. The BOK said Monday it will this week complete
retrieving the dollar funds it provided to local banks through swap deals by
using FX reserves.
As of the end of June, South Korea was the world's sixth-largest holder of
foreign exchange reserves after China, Japan, Russia, Taiwan and India.
sooyeon@yna.co.kr
(END)