South Korea’s foreign exchange reserves retreated $2.06 billion from a month earlier to $402 billion at the end of May, the lowest since last August, the Bank of Korea said Wednesday.

The reserves shrank for two months in a row, largely due to the strengthening U.S. dollar that lowered the value of non-dollar denominated foreign assets held in the country.

The U.S. dollar index, which measures the value of the U.S. dollar relative to six currencies, gained 0.3 percent from the previous month to 98.14 as of the end of May, meaning that the dollar stayed stronger against world’s six major currencies. Against the dollar, the euro lost 0.5 percent, the pound 2.5 percent was weaker and the Australian dollar 2.0 percent down. The Japanese yen, on the other hand, was 1.9 percent stronger.

By asset type, securities including government, public entity and corporate bonds and asset-backed securities grew $1.63 billion on month to $375.7 billion. But deposits denominated in foreign currency slipped $3.67 billion to $15.71 billion.

The special drawing rights (SDR) from the International Monetary Fund (IMF) declined $10 million from a month ago to $3.18 billion in May. SDR is an international reserve asset created by the IMF that can be withdrawn by its members in proportion to their quota in the IMF.

The country’s reserve position in the IMF came at $2.5 billion, down $10 million. Gold reserve remained unchanged at $4.79 billion.

As of late April, Korea was the world’s ninth largest holder of foreign exchange reserves. China topped the list with $3.1 trillion, followed by Japan at $1.29 trillion and Switzerland at $806.8 billion.

By Lee Yu-sup and Choi Mira

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