Last month, foreign currency deposits held by domestic residents increased by over $8.5 billion, rebounding after a record decline the previous month.
According to the Bank of Korea's report on 'Trends in Resident Foreign Currency Deposits' released on May 29, the balance of foreign currency deposits held by residents at foreign exchange banks was recorded at $110.68 billion as of the end of April.
Resident foreign currency deposits refer to deposits made by Korean nationals, domestic companies, foreign nationals residing in Korea for more than six months, and foreign companies operating in Korea.
Both corporate and individual deposits saw increases. The balances for corporate and individual deposits were reported at $94.88 billion and $15.8 billion, respectively, with corporate deposits rising by $8.08 billion and individual deposits increasing by $430 million.
By currency type, the balance of dollar deposits rose by $7.68 billion from the end of March to reach $93.32 billion. Yen deposits increased by $400 million to $8.22 billion, while euro deposits rose by $260 million to $6.57 billion.
The Bank of Korea attributed the increase to a rise in investor deposits at securities firms, inflows of funds for overseas investments by pension funds, and large corporations receiving current account payments. It noted that yen deposits increased due to higher investor deposits at securities firms, while euro deposits saw a slight rise due to some companies issuing bonds.
Domestic investors turned to net selling of U.S. stocks last month, selling $468.93 million worth of shares. This is interpreted as the proceeds from dollar sales not being exchanged but instead deposited. The average monthly exchange rate based on weekly closing prices remained high, increasing from 1,448.38 won in February to 1,492.50 won in March and 1,485.03 won in April.
* This article has been translated by AI.
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