Last month, South Korea's foreign exchange reserves decreased by nearly $5 billion in a month, falling to the early $400 billion range. The expansion of foreign exchange transactions with the National Pension Service contributed to this change. As of the end of March, the size of the foreign exchange reserves dropped to 10th in the world.
According to the 'foreign exchange reserves as of the end of April 2025' announced by the Bank of Korea on the 8th, South Korea's foreign exchange reserves at the end of last month were $404.67 billion, a decrease of $4.99 billion compared to the end of the previous month ($409.66 billion). This is the lowest level since April 2020 ($404.98 billion).
The Bank of Korea noted that the increase in the won-dollar exchange rate, which jumped to 1,487.6 won due to the impact of the United States' reciprocal tariffs, contributed to the rise in transactions with the National Pension Service and foreign exchange transactions.
The effect of the end-of-quarter adjustments that had increased foreign currency reserves in March has also diminished. Financial institutions tend to increase foreign currency deposits in March, June, and September to comply with the Bank for International Settlements (BIS) ratios at the end of each quarter.
Looking at the details of foreign currency reserves, they are composed of $356.5 billion (88.1%) in securities, $23.23 billion (5.7%) in deposits, $15.68 billion (3.9%) in special drawing rights from the International Monetary Fund (IMF), $4.79 billion (1.2%) in gold, and $4.47 billion (1.1%) in IMF positions.
As of the end of March, South Korea's foreign exchange reserves amounting to $409.7 billion rank 10th in the world. For the first time since the ranking began in 2000, it has dropped below 9th place. Germany, which was ranked 10th last month, raised its reserves by $28.8 billion in a month to move up to 8th place.
China had the most reserves at $3.2407 trillion, followed by Japan ($1.2725 trillion), Switzerland ($940.8 billion), India ($668.3 billion), Russia ($647.4 billion), Taiwan ($578 billion), Saudi Arabia ($454.2 billion), Germany ($435.5 billion), and Hong Kong ($412.5 billion).
The Bank of Korea believes that a significant portion of the factors contributing to the decrease is temporary and that, as the exchange rate is on a downward trend, the possibility of foreign exchange reserves falling below $400 billion is low. A Bank of Korea official said, “During the swap transaction period, the foreign exchange reserves decrease by the transaction amount, but since the funds are returned at maturity, the decrease in foreign exchange reserves is expected to be brief.”