SEOUL, SOUTH KOREA / RankWire.AI / – The Bank of Korea announced that the country’s foreign exchange reserves experienced their largest monthly increase on record in August, totaling $442.28 billion at the end of the month. The central bank reported a rise of $14.33 billion compared to $427.95 billion at July’s close. This surge marked the most significant growth since official reserve data collection began in 1971. It also pushed South Korea’s holdings to their highest level since May 2022, accelerating sharply from the smaller gains observed over the previous two months.
South Korea’s reserves have now increased for three consecutive months, following growths of $370 million in June and $590 million in July. The August increase also surpassed the previous monthly record of $14.29 billion, set in May 2009. Despite this substantial rise, the total reserves are still below the all-time high of $469.21 billion recorded in October 2021. These figures reflect assets held within the nation’s official foreign exchange reserve holdings, reported in U.S. dollars.
The Bank of Korea attributed the August increase to elevated foreign currency deposits, returns from reserve asset management, and fluctuations in exchange rates. Changes in currency values can influence the dollar value of assets denominated in euros, pounds, and other currencies. When reporting total reserves, the bank converts these holdings into U.S. dollars. Consequently, variations in major exchange rates can cause the reported reserve balance to fluctuate even if the underlying foreign currency assets remain unchanged within the portfolio.
Securities and Deposits Lead August Growth
Foreign securities continued to be the largest component of South Korea’s foreign exchange reserves. Their value increased by $7.07 billion in August, reaching $387.07 billion, which accounts for 87.5% of the total reserves. This category includes government and corporate securities held among official reserve assets. Foreign currency deposits also saw a significant rise, climbing by $7.17 billion to $30.30 billion, making up a large part of the overall growth alongside the increase in foreign securities.
Other reserve components experienced smaller adjustments. Special drawing rights grew by $60 million to $15.77 billion, while the reserve position stood at approximately $4.34 billion. Gold reserves remained steady at $4.79 billion. Overall, securities and foreign currency deposits contributed almost entirely to the $14.33 billion monthly increase. The reserve composition remained heavily weighted toward securities, with deposits also marking one of the largest individual component increases during August.
Reserves Reach Their Highest Since May 2022
The August total marked South Korea’s highest reserve level in over four years. The reserves last exceeded this figure in May 2022 when they reached $447.71 billion. The August figure also narrowed the gap with the peak of $469.21 billion recorded in October 2021. Official foreign exchange reserves include securities, deposits, gold, special drawing rights, and the country’s reserve position within the international monetary system. These figures are published monthly as part of the country’s routine reporting on external financial assets.
Recent data indicate a notable slowdown in the pace of reserve growth during the summer months. June and July saw modest increases, but August’s record-breaking monthly gain pushed the total to $442.28 billion, up nearly $14.3 billion from one month prior. Although still below the historical peak, this is the highest level since May 2022, driven by rises in securities, foreign currency deposits, and the dollar value of selected reserve assets.