Last month, the resident foreign currency deposit balance decreased by nearly $1.6 billion, marking a decline for the second consecutive month. This was influenced by the depreciation of the won, which led to an increase in the value of other currencies such as the euro and the U.S. dollar, prompting investors to realize profits.
According to a Bank of Korea announcement on the 23rd, the resident foreign currency deposit balance at foreign exchange banks at the end of last month amounted to $96.94 billion, a decrease of $1.59 billion compared to the previous month. Resident foreign currency deposits refer to foreign currency deposits held by locals and domestic corporations, as well as foreigners residing in the country for more than six months and foreign corporations operating in the country.
The resident foreign currency deposits increased continuously in December last year (+$2.87 billion) and January (+$2.14 billion), but reversed to a decrease in February (-$4.91 billion). This marks a consecutive decline for two months up until last month.
By currency type, the U.S. dollar currency balance decreased by $1.42 billion, totaling $83.09 billion. In particular, corporate deposits accounted for most of the decrease at $1.12 billion. The Bank of Korea explained that the increase in dollar expenditures by corporations was due to overseas direct investments and payments for imports.
The euro deposits decreased by $50 million to $4.11 billion. The won-euro exchange rate surged from 1,497.0 won at the end of February to 1,587.9 won at the end of last month, prompting investors to realize profits. Yen deposits, on the other hand, recorded an increase of $11 million to $7.87 billion, due to temporary deposits from dividend payments received in yen by some corporations.
By entity, corporate deposits decreased by $1.23 billion and individual deposits decreased by $360 million. At the end of February, the balances were reported as $83.39 billion and $13.55 billion, respectively.