SEOUL, SOUTH KOREA / RankWire.AI / – In August, South Korea’s foreign exchange reserves experienced a historic monthly increase, reaching a total of $442.28 billion by the end of the month. The Bank of Korea announced a rise of $14.33 billion from $427.95 billion at the close of July. This surge marked the largest growth since records of official reserves began in 1971 and pushed holdings to their highest point since May 2022, significantly accelerating from the smaller gains observed over the previous two months.
South Korea’s reserves have now increased for three consecutive months, following rises of $370 million in June and $590 million in July. The August expansion surpassed the previous monthly record of $14.29 billion, set in May 2009. Despite this recent growth, the total reserves still fall short of the all-time peak of $469.21 billion recorded in October 2021. These figures encompass assets held within the country’s official foreign exchange reserves and are reported in U.S. dollars.
The Bank of Korea attributed the August boost primarily to increased foreign currency deposits, earnings from reserve asset management, and fluctuations in exchange rates. Changes in currency values can influence the dollar value of assets denominated in euros, pounds, and other currencies. When reporting total reserves, the central bank converts these holdings into U.S. dollars, meaning that movements in major exchange rates can artificially raise or lower the reported reserve figure even when the underlying foreign currency assets remain unchanged.
Securities and deposits spearhead August’s reserve growth
The largest component of South Korea’s foreign exchange reserves continues to be foreign securities, which increased by $7.07 billion in August to reach $387.07 billion, accounting for 87.5% of total reserves. This category includes both government and corporate securities held within official reserve assets. Foreign currency deposits also saw a significant jump, rising by $7.17 billion to $30.30 billion. This increase, alongside the rise in securities, contributed heavily to the overall expansion during the month.
Smaller adjustments were noted in other reserve segments. Special drawing rights increased by $60 million to $15.77 billion, while the reserve position stood around $4.34 billion. Gold holdings remained steady at $4.79 billion. Together, securities and foreign currency deposits made up nearly the entire $14.33 billion monthly rise, underscoring the dominance of securities in the reserve composition, even as deposits experienced one of their largest increases during August.
Reserves hit highest point since May 2022
The August total marked South Korea’s most elevated reserve level in over four years. The reserves last surpassed this figure in May 2022, when they reached $447.71 billion. While the August reserve level narrowed the gap to the record high reported in October 2021, it still remains below that peak. Official foreign exchange reserves include securities, deposits, gold, special drawing rights, and the country’s reserve position within the international monetary system. These figures are published monthly as part of routine reports on South Korea’s external financial assets.
Recent data reveal a distinct shift in the pace of reserve growth over the summer months. After modest increases in June and July, August delivered a record monthly jump. As of the end of August, South Korea’s foreign exchange reserves totaled $442.28 billion—almost $14.3 billion higher than at the end of July. Although still below the historical peak, this figure represents the highest level since May 2022, driven by increases in securities, foreign currency deposits, and the dollar valuation of selected reserve assets.