SEOUL, March 23 (AJP) - Resident foreign currency deposits in South Korea declined for a second straight month in February, as corporate demand for overseas investments and import settlements weighed on balances.
According to data released Monday by the Bank of Korea (BOK), outstanding resident foreign currency deposits at foreign exchange banks stood at $117.53 billion at end-February, down $490 million from a month earlier. The decline follows a sharper $1.4 billion drop in January, extending the downward trend.
Resident foreign currency deposits include holdings by domestic residents, local companies, foreigners residing in Korea for more than six months, and foreign corporations operating in the country.
By currency, U.S. dollar-denominated deposits fell by $340 million, while Japanese yen deposits declined by $210 million. In contrast, euro deposits rose by $200 million.
Corporate deposits — which make up the bulk of total holdings — led the decline, dropping $450 million to $100.23 billion. Individual deposits edged down $40 million to $17.31 billion.
By institution, deposits at domestic banks decreased by $280 million, while those at local branches of foreign banks fell by $210 million.
The BOK said the decline in dollar deposits was driven by outbound investments and payments for import bills, while the drop in yen deposits reflected settlements of current account transactions.
The data suggest the continuation of demand-driven fluctuations seen in recent months. In January, euro deposits had also declined, largely due to corporate payment needs.
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