S.Korea’s foreign currency deposits fall as dollar’s strength seen limited

Euro deposits, however, rose on Korean importers' increasing demand for settlement in euros

S.Korea’s foreign currency deposits fall as dollar’s strength seen limited
Jin-gyu Kang 1
2024-02-23 20:38:00 josep@hankyung.com
Foreign exchange

South Korea’s foreign currency deposits fell for the first time in four months in January as the dollar’s further gains versus the won from the current level are seen as limited.

Residents’ outstanding foreign currency-denominated deposits at banks stood at $98.1 billion at the end of January, down $5.78 billion from the previous month, according to data from the Bank of Korea.

Such deposits refer to foreign-currency savings by Korean residents, foreigners staying in Korea for more than six months and foreign companies operating in Korea.

Dollar-denominated deposits dwindled the most, declining by $5.39 billion to $80.4 billion last month from the month prior.

Yen-denominated deposits fell by $300 million, while yuan deposits dropped by $110 million, according to the BOK data.

Euro-denominated deposits, however, rose by $90 million due to increased savings by Korean importers for settlement in euros.

S.Korea’s foreign currency deposits fall as dollar’s strength seen limited

“Local companies’ appetite for the greenback has reduced on expectations that the dollar won’t rise significantly against the won from the current level,” said a BOK official.

WEAK KOSPI MOMENTUM

In the domestic foreign exchange market, the dollar-won rate finished at 1,331 won per dollar after opening at 1,327.7 won, compared with the previous day’s close of 1,337.7.

The Japanese currency finished at 883.59 won per 100 yen versus the previous close of 884.53 won.

In the overnight New York stock market, the main stock index performed strongly as Nvidia Corp.’s decent earnings emboldened investors’ risk appetite.

In the Korean stock market, the benchmark Kospi index opened stronger at 2,681.03, up 0.63% from the previous day, but lost steam throughout the day, ending Friday up 0.13% at 2,667.7.

Write to Jin-gyu Kang at josep@hankyung.com

In-Soo Nam edited this article.
#Economy #Bank of Korea #BOK #foreign currency deposits #foreign savings #dollar-won exchange rates

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