South Korea sees sharp rise in FX deposits on equity, trade flows

SEOUL, January 26 (AJP) - Foreign-currency deposits by residents in South Korea surged by nearly $16 billion in December, marking the largest monthly increase on record, driven by inflows linked to foreigners’ equity purchases, trade-related payments and rising client deposits at securities firms amid robust overseas investment.

Data released by the Bank of Korea on Monday showed resident foreign-currency deposits at domestic banks totaled $119.43 billion at the end of December, up $15.88 billion from the end of November.

The increase followed a $1.72 billion rise in November and was the biggest monthly gain since the data series began in June 2012.

Resident foreign-currency deposits include accounts held in South Korea by citizens, local companies, foreigners who have lived in the country for at least six months, and foreign companies operating domestically.

By holder, corporate deposits climbed $14.07 billion to $102.5 billion, while individual deposits rose $1.82 billion to $16.93 billion, the central bank said.

By currency, U.S. dollar-denominated deposits increased $8.34 billion to $95.93 billion. Euro deposits rose $6.35 billion to $11.75 billion, while yen deposits gained $870 million to reach $9 billion.

By bank type, deposits at domestic banks rose $12.76 billion to $101.6 billion, and deposits at branches of foreign banks increased $3.13 billion to $17.83 billion.

The BOK said the rise in dollar deposits reflected funds placed for foreigners’ purchases of stakes in South Korean companies, estimated at about $2 billion, as well as trade-related payments by exporters and importers and higher client deposits at securities firms.

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.