ID :
22295
Thu, 10/02/2008 - 09:20
Auther :
Shortlink :
http://m.oananews.org//node/22295
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S. Korea's FX reserves fall by US$3.53 bln in September
SEOUL, Oct. 2 (Yonhap) -- South Korea's foreign exchange reserves fell by US$3.53 billion in September mainly because foreign exchange authorities supplied dollars to the swap market to ease financial jitters, the central bank said Thursday.
The nation's foreign reserves reached US$239.7 billion as of the end of
September, compared with $243.2 billion from a month earlier, the Bank of Korea
(BOK) said. The foreign exchange reserves declined for the sixth straight month.
Foreign reserves consist of securities and deposits denominated in overseas
currencies along with International Monetary Fund reserve positions, special
drawing rights and gold bullion.
"Despite higher investment profits, foreign reserves fell in September as foreign
exchange authorities injected more dollars into the swap market in a bid to ease
financial market jitters sparked by the global credit crunch," the central bank
said. "A stronger U.S. dollar also brought down the dollar conversion value of
assets in other currencies like the euro."
The fall in the foreign reserve came as the government and the BOK announced in
July that they would use some of the nation's foreign reserves to prop up the
won, a move to fight inflation. Despite their massive dollar sales, the local
currency has declined more than 21 percent against the dollar so far this year.
A weaker won against the greenback is putting upward pressure on inflation by
making imports more expensive.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
The Finance Ministry recently announced that it will inject a total of $10
billion into the nation's swap market to provide liquidity amid tightening credit
conditions.
As of the end of August, South Korea was the world's sixth-largest holder of
foreign exchange reserves. China held the world's largest foreign reserves, worth
$1.81 trillion, followed by Japan with $996.7 billion and Russia with $581.6
billion. India held the world's fourth-largest reserves with $295.3 billion,
followed by Taiwan with $282.1 billion.
The nation's foreign reserves reached US$239.7 billion as of the end of
September, compared with $243.2 billion from a month earlier, the Bank of Korea
(BOK) said. The foreign exchange reserves declined for the sixth straight month.
Foreign reserves consist of securities and deposits denominated in overseas
currencies along with International Monetary Fund reserve positions, special
drawing rights and gold bullion.
"Despite higher investment profits, foreign reserves fell in September as foreign
exchange authorities injected more dollars into the swap market in a bid to ease
financial market jitters sparked by the global credit crunch," the central bank
said. "A stronger U.S. dollar also brought down the dollar conversion value of
assets in other currencies like the euro."
The fall in the foreign reserve came as the government and the BOK announced in
July that they would use some of the nation's foreign reserves to prop up the
won, a move to fight inflation. Despite their massive dollar sales, the local
currency has declined more than 21 percent against the dollar so far this year.
A weaker won against the greenback is putting upward pressure on inflation by
making imports more expensive.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
The Finance Ministry recently announced that it will inject a total of $10
billion into the nation's swap market to provide liquidity amid tightening credit
conditions.
As of the end of August, South Korea was the world's sixth-largest holder of
foreign exchange reserves. China held the world's largest foreign reserves, worth
$1.81 trillion, followed by Japan with $996.7 billion and Russia with $581.6
billion. India held the world's fourth-largest reserves with $295.3 billion,
followed by Taiwan with $282.1 billion.
