SEOUL, SOUTH KOREA / RankWire.AI / – South Korea’s foreign exchange reserves saw a significant monthly increase in August, reaching $442.28 billion by the end of the month. The Bank of Korea reported a rise of $14.33 billion from $427.95 billion at the close of July. This growth marked the largest since official reserve records began in 1971. It also pushed the country’s holdings to their highest point since May 2022, showing a sharp acceleration compared to the smaller gains recorded over the previous two months.
Reserves in South Korea increased for the third consecutive month, following gains of $370 million in June and $590 million in July. The August increase also surpassed the previous monthly record of $14.29 billion, set in May 2009. Despite the latest boost, the total remains below the all-time high of $469.21 billion registered in October 2021. These figures reflect assets available within the country’s official foreign exchange reserves and are reported in U.S. dollars.
The Bank of Korea attributed the August surge to higher foreign currency deposits, earnings from reserve asset management, and fluctuations in exchange rates. Changes in currency values can influence the dollar amount of assets held in euros, pounds, and other currencies. When reporting total reserves, the central bank converts these holdings into U.S. dollars. Consequently, movements in key exchange rates can increase or decrease the reported reserve figure, even if the underlying foreign currency assets remain unchanged within the portfolio.
Securities and deposits are primary contributors to August’s record increase
Foreign securities continued to be the largest component of South Korea’s foreign exchange reserves. Their value increased by $7.07 billion in August to $387.07 billion, representing 87.5% of total reserves. This category includes government and corporate securities held as part of official reserve assets. Foreign currency deposits also saw a sharp rise, climbing by $7.17 billion to $30.30 billion. These assets contributed significantly to the overall growth, alongside the increase in foreign securities.
Smaller changes were observed in other reserve components. Special drawing rights increased by $60 million to $15.77 billion, while the reserve position stood at approximately $4.34 billion. Gold holdings remained steady at $4.79 billion. Overall, securities and foreign currency deposits made up nearly all of the $14.33 billion monthly increase. The reserve composition thus continued to be heavily weighted toward securities, even as deposits experienced one of their largest individual increases during August.
The total reserve level hits a new high since May 2022
The August reserve balance marked South Korea’s highest in more than four years. The reserves last exceeded this level in May 2022, when they reached $447.71 billion. The August figure also narrowed the gap with the record high reported in October 2021. Official foreign exchange reserves include securities, deposits, gold, special drawing rights, and the country’s reserve position in the international monetary system. These figures are published each month as part of regular reporting on South Korea’s external financial assets.
Recent data reveal a notable shift in the growth rate of reserves over the summer. While June and July saw modest increases, August delivered a record monthly gain. By the end of August, South Korea had $442.28 billion in foreign exchange reserves, which is nearly $14.3 billion more than the previous month. Although still below the historical peak, this is the highest level since May 2022, supported by gains in securities, foreign currency deposits, and the dollar value of select reserve assets.