Korea's June FX reserve rebounds on weaker U.S. dollar

South Korea’s foreign currency reserves rebounded to $403.1 billion in June after two straight months of decline due to the weakening in the U.S. dollar.

According to data released by the Bank of Korea on Wednesday, the nation’s foreign exchange reserves stood at $403.1 billion at the end of June, adding $1.1 billion from a month earlier.

The total value of foreign currency holdings in Korea that peaked at $405.5 billion in January fluctuated in line with greenback performance.

FX balance picked up last month after the fall in the U.S. dollar, which pushed up the value of non-dollar denominated foreign assets such as euro and yen held in Korea. The U.S. dollar index, which measures the value of the U.S. dollar relative to world’s six major currencies, lost 2.0 percent last month, meaning the dollar turned that weaker versus others in the currency basket.

The value of foreign securities, including government bonds and corporate debts, stood at $373.8 billion, down $1.95 billion on month. But deposits denominated in foreign currency grew $2.78 billion to $18.49 billion

The special drawing rights, international reserve asset created by the International Monetary Fund (IMF) to supplement the member countries’ reserves, rose $280 million to $3.46 billion.

The country’s reserve position in the IMF declined $200 million to $2.49 billion. Gold reserves remained unchanged at $4.79 billion.

As of the end of May, Korea was the world’s ninth largest holder of foreign exchange reserves. China topped the list with $3.1 trillion, followed by Japan with $1.3 trillion and Switzerland $804.3 billion.

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