SEOUL, July 27 (AJP) -South Koreans increased their foreign currency deposits by more than $1 billion, or the largest in in four months in June, driven by hefty semiconductor export proceeds and rising funds parked for overseas stock investments.
Resident foreign currency deposits at domestic banks reached $113.33 billion at the end of June, up $1.08 billion from a month earlier, according to data released by the Bank of Korea on Monday. The balance was the highest since February.
The increase was concentrated in U.S. dollar deposits, which surged $2.25 billion to a record $97.8 billion, accounting for 86.3 percent of total foreign currency deposits.
The central bank attributed the rise to larger customer deposits at securities firms, including margin collateral for exchange-traded derivatives and funds earmarked for overseas equity investments, as well as export payments received by large corporations.
The gains came even as the won remained weak against the dollar during the month, underscoring continued demand for overseas investments and robust export earnings from South Korea's semiconductor sector.
Corporate foreign currency deposits rose $1.58 billion to $98.99 billion, while corporate dollar deposits added $2.59 billion to an all-time high of $85.58 billion. Personal foreign currency deposits, by contrast, fell $500 million to $14.33 billion, with individual dollar deposits declining $350 million.
"A high won-dollar exchange rate typically encourages individuals to sell dollars," a Bank of Korea official said, explaining the decline in household holdings.
By currency, euro-denominated deposits fell $460 million to $5.84 billion as some companies repaid loans, while yen deposits declined $410 million to $7.12 billion due mainly to payments for current-account transactions.
By bank type, resident foreign currency deposits at domestic banks edged up $50 million to $92.78 billion, while those held at foreign bank branches in South Korea increased by $1.03 billion to $20.55 billion.
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