Foreign exchange reserves down in March due to lower value of assets converted into dollars, selling of dollars to dampen volatility

SEOUL, April 5 (Yonhap) — South Korea’s foreign exchange reserves shrank in March as the dollar-converted value of its assets fell and the unloading of dollars aimed at curbing a sharp drop in the local currency, central bank data showed on Tuesday.

The country’s foreign exchange reserves stood at $457.81 billion at the end of March, down $3.96 billion from the previous month, according to data provided by the Bank of Korea (BOK).

The BOK attributed the drop to a decline in the dollar-converted value of its assets and “market stabilization measures,” apparently referring to selling dollars to curb the won’s excessive decline.

The won fell about 8% against the US dollar in March, according to market data.

Foreign exchange reserves include securities and deposits denominated in foreign currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.

The data showed foreign securities were valued at $410.21 billion at the end of February, down $630 million from the previous month. This figure represented 89.6% of total foreign exchange reserves.

The value of deposits also fell by $3.39 billion over the month to $22.81 billion at the end of March, representing 5% of reserves. Gold holdings remained unchanged at $4.8 billion, the data showed.

South Korea was the world’s eighth-largest holder of foreign exchange reserves at the end of February, the BOK said.