Seoul: Foreign currency deposits in South Korea experienced a decline in September, driven by increased overseas investments by pension funds and corporate payments for trade settlements. This information comes from recent data released by the Bank of Korea (BOK).
According to Yonhap News Agency, the total outstanding foreign currency-denominated deposits held by residents amounted to US$107.09 billion at the end of September, marking a decrease of $550 million from the previous month. The term 'residents' encompasses South Korean citizens, foreigners residing in the country for more than six months, and foreign companies, with the data specifically excluding interbank deposits.
A breakdown of the figures reveals a $700 million reduction in corporate foreign currency deposits, bringing the total to $92.26 billion. Conversely, individual holdings saw a slight increase of $150 million, reaching $14.83 billion. When analyzed by currency, U.S. dollar-denominated deposits fell by $240 million to $90.72 billion, and Japanese yen deposits decreased by $150 million to $8.89 billion. Euro deposits also experienced a decline, dropping $120 million to $5.01 billion. However, deposits in Chinese yuan saw an increase of $60 million, totaling $1.19 billion.
A BOK official explained that the decline in dollar-denominated deposits was primarily attributed to a reduction in investors' margin deposits at securities firms, in addition to the aforementioned overseas investments by pension funds and corporate payments for trade settlements.