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Foreign currency deposits in S. Korea reduce on import settlement

Foreign currency deposits in S. Korea reduce on import settlement

SEOUL: Foreign currency deposits in South Korea reduced last month due to soft demand for Chinese yuan deposits and withdrawal of U.S. dollars for import settlements, central bank data showed on Thursday.

Deposits denominated in foreign currencies, held by local residents, came to 53.47 billion U.S. dollars as of end-February, down 2.13 billion dollars from a month earlier, according to the Bank of Korea (BOK). The February decline came as South Korean companies withdrew dollar funds to settle imports, while exporters refrained from depositing export proceeds into bank accounts.

Demand for Chinese yuan deposits weakened due to narrower differences between deposits rates in South Korea and China. Deposits denominated in the Chinese currency stood at 4.34 billion dollars at the end of February, marking the lowest since November 2013. The number was down 60 million dollars from a month ago.

The dollar deposits shed 1.65 billion dollars from the previous month to 42.51 billion dollars as of end-February, with the Japanese yen deposits falling 270 million dollars to 2.94 billion dollars. Euro deposits dipped 150 million dollars to 2.48 billion dollars, but other currency deposits, including the British pound and Australian dollar, was unchanged at 1.2 billion dollars.