Korea’s FX deposits at 28-mo low in Apr amid rapid weakening in KRW

2019.05.17 12:58:27

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Foreign-currency deposits held by South Korean banks fell to the lowest in 28 months in April as companies sold off U.S. dollars that have surged against the Korean won in recent weeks amid increasing risk aversion.

According to data released by the Bank of Korea (BOK) on Thursday, foreign deposits held by Korean lenders totaled $63.2 billion as of the end of April, down $3.95 billion from a month earlier. The figure was the lowest since the end of December 2016 when the balance fell to $58.91 billion.

Dollar-denominated holdings dropped the most $3.12 billion to $53.46 billion on the selling spree by companies, with some repaying maturing debts with the withdrawals, after the greenback has rapidly appreciated against the local currency. The U.S. dollar gained 3 percent from 1,135.1 won at the end of March to 1,168.2 won at the end of April.

Deposits in Japanese yen amounted to $3.96 billion, down $170 million, during the period as companies used up savings to pay off imports dues amid strengthening of the yen.

Euro-denominated savings also dropped $400 million to $3.03 billion, with Chinese yuan deposits $100 million down to $1.15 billion. Deposits held in other currencies including the pound sterling and Australian dollar also lost $160 million to $1.6 billion.

By holder, companies held $49.96 billion in foreign-currency deposits, down $3.64 billion during the period, while individuals $13.24 billion, also down $310 million.

By banks, local lenders held $53.4 billion in foreign-currency deposits, down $3.7 billion, while local branches operated by foreign lenders $9.8 billion, down $250 million.

Foreign currency deposits in banks include those held by Korean individuals and companies, as well as foreigners who have stayed in Korea for six months or more and foreign companies operating in the country.

By Kim Yeon-joo and Lee Ha-yeon

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