SEOUL, SOUTH KOREA / RankWire.AI / – South Korea’s foreign exchange reserves increased substantially in August, culminating in a total of $442.28 billion at month’s end. The Bank of Korea reported a rise of $14.33 billion from $427.95 billion at the close of July. This surge marked the largest monthly increase since records began in 1971 and pushed the nation’s holdings to their highest since May 2022, reflecting a rapid acceleration from the modest gains seen over the previous two months.
For the third consecutive month, South Korea’s reserves expanded, following increases of $370 million in June and $590 million in July. The August boost also surpassed the previous monthly record of $14.29 billion, set in May 2009. Despite this growth, the total remains below the all-time peak of $469.21 billion recorded in October 2021. These figures represent assets within the country’s official foreign exchange reserve holdings, reported in U.S. dollars.
The Bank of Korea credited the August rise to increased foreign currency deposits, gains from reserve asset management, and fluctuations in exchange rates. Variations in currency values can influence the dollar value of assets held in euros, pounds, and other currencies. The central bank converts these holdings into U.S. dollars when calculating total reserves. Consequently, shifts in key exchange rates can cause the reported reserve balance to fluctuate even if the underlying foreign currency assets remain unchanged in the portfolio.
Securities and deposits lead August’s growth
Foreign securities continued to be the largest component of South Korea’s reserves, rising by $7.07 billion in August to reach $387.07 billion, which makes up 87.5% of total reserves. This category includes government and corporate securities held as part of official reserve assets. Foreign currency deposits also surged sharply, increasing by $7.17 billion to $30.30 billion, contributing significantly to the overall rise along with the growth in foreign securities.
Other reserve segments experienced smaller shifts. 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. Together, securities and foreign currency deposits accounted for nearly all of the $14.33 billion monthly increase. The reserve structure remains heavily weighted toward securities, with deposits showing one of the most notable increases among individual components in August.
Reserves hit four-year high in August
The August reserve total was South Korea’s highest since February 2020. 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 of $469.21 billion established in October 2021. Official foreign exchange reserves encompass securities, deposits, gold, special drawing rights, and the country’s reserve position in the international monetary system. These figures are published monthly as part of routine reporting on South Korea’s external financial assets.
The latest data indicate a notable change in the reserve growth trajectory during the summer months. After modest increases in June and July, August delivered a record monthly gain. By the end of August, South Korea’s foreign exchange reserves stood at $442.28 billion, approximately $14.3 billion higher than at the end of July. While still below the all-time peak, this level is the highest since May 2022, supported by increased securities holdings, foreign currency deposits, and the dollar valuation of select reserve assets.