South Korea’s foreign reserves fall to $415.6 billion in Oct

by IANS |

Seoul, Nov 5 (IANS) South Korea's foreign reserves fell in October, snapping three consecutive months of rise due to the decreased value of non-US dollar assets amid a strong US dollar and decreased deposits, central bank data showed on Tuesday.

The country's foreign reserves came to $415.69 billion as of end-October, down $4.28 billion from a month earlier, according to the data from the Bank of Korea (BOK).

The central bank attributed the fall to a decline in the converted value of non-dollar assets amid the strong greenback and a decline in deposits, reports Yonhap news agency.

The dollar index that gauges the greenback's value against major peers rose 3.6 percent last month, shedding the converted value of non-dollar assets, the central bank said.

Foreign reserves consist of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.

Foreign securities, such as U.S. Treasuries, were valued at $373.25 billion as of end-October, down $50 million from a month earlier. They accounted for 89.8 percent of foreign reserves, the data showed.

The value of deposits stood at $18.42 billion at the end of October, down $3.86 billion over the cited period.

South Korea ranked as the world's ninth-largest holder of foreign reserves at the end of September, the BOK said.

Meanwhile, South Korea's economic growth will be slower than earlier expected this year due to a slowdown in outbound shipments the central bank chief said.

Earlier, the Bank of Korea (BOK) had expected Asia's fourth-largest economy to grow 2.4 per cent this year, but the expansion may be slower than the estimate at between 2.2 per cent and 2.3 per cent, BOK Gov. Rhee Chang-yong told lawmakers.

"It is highly likely to see this year's growth rate be lower than our earlier expected rate of 2.4 percent," Rhee said. "I think the rate will be at between 2.2 and 2.3 per cent."

The country's economy grew at a slower-than-expected rate of 0.1 percent on-quarter in the third quarter of the year amid softening export growth, upping the possibility that the central bank may conduct another rate cut earlier than expected after its first rate reduction in over three years this month.