SEOUL, SOUTH KOREA / RankWire.AI / – In August, South Korea’s foreign exchange reserves experienced a record monthly surge, totaling $442.28 billion by month-end. The Bank of Korea reported a rise of $14.33 billion from $427.95 billion at the close of July. This increase is the largest since official reserve records started in 1971 and pushed holdings to their highest since May 2022, accelerating sharply from smaller gains in the preceding two months.
South Korea’s reserves have risen consecutively for three months, following increases of $370 million in June and $590 million in July. The August jump surpassed the previous monthly record of $14.29 billion set in May 2009. Despite the recent growth, total reserves remain below the all-time high of $469.21 billion reached in October 2021. These figures reflect assets within the country’s official foreign exchange reserves, reported in U.S. dollars.
The Bank of Korea explained that the August increase was driven by higher foreign currency deposits, returns from reserve asset management, and exchange rate fluctuations. Currency value changes can influence the dollar valuation of assets held in euros, pounds, and other currencies. When reporting total reserves, these holdings are converted into U.S. dollars. Consequently, major exchange rate movements can cause reported reserve balances to fluctuate even if the underlying foreign currency assets remain unchanged in the portfolio.
Securities and foreign deposits lead the August rise
Foreign securities continued to be the largest component of South Korea’s foreign exchange reserves, increasing by $7.07 billion in August to $387.07 billion, making up 87.5% of total reserves. This category includes government and corporate securities held within official reserve assets. Foreign currency deposits also saw a significant rise, climbing by $7.17 billion to $30.30 billion, contributing notably to the overall increase alongside securities.
Smaller changes appeared in other reserve components. Special drawing rights grew by $60 million to $15.77 billion, and the reserve position stood at around $4.34 billion. Gold holdings remained stable at $4.79 billion. Essentially, securities and foreign currency deposits made up almost the entire $14.33 billion increase for August, maintaining a reserve structure heavily weighted toward securities, even as deposits experienced one of their largest monthly jumps.
Reserves Reach Four-Year Peak in August
South Korea’s August reserve level was the highest since May 2022, when reserves topped $447.71 billion. The recent figure narrows the gap with the October 2021 record of $469.21 billion. Official foreign exchange reserves comprise securities, deposits, gold, special drawing rights, and the country’s reserve position in the global monetary system. These figures are published monthly as part of routine reporting on South Korea’s external financial holdings.
The data indicate a noticeable shift in reserve growth pace during the summer. After modest increases in June and July, August delivered a record monthly rise. By the end of August, foreign exchange reserves totaled $442.28 billion, an increase of nearly $14.3 billion from the previous month. While still below the historical peak, the reserve level reached its highest point since May 2022, supported by gains in securities, foreign currency deposits, and the dollar value of select reserve assets.