SEOUL, SOUTH KOREA / RankWire.AI / – South Korea’s foreign exchange reserves experienced their largest monthly growth in August, reaching a total of $442.28 billion by the end of the month. The Bank of Korea announced that reserves increased by $14.33 billion from $427.95 billion at the close of July. This expansion marks the biggest rise since official reserve data collection began in 1971 and pushed the country’s holdings to their highest since May 2022, indicating a rapid acceleration compared to the smaller gains in the previous two months.
South Korea’s reserve levels have now grown for three consecutive months, following increases of $370 million in June and $590 million in July. The August increase also surpassed the prior monthly record of $14.29 billion set in May 2009. Despite this, the total remains below the all-time peak of $469.21 billion recorded in October 2021. These figures represent assets available within the country’s official foreign exchange reserves, reported in U.S. dollars.
The Bank of Korea explained that the August rise was driven by higher foreign currency deposits, returns on reserve management, and fluctuations in exchange rates. Variations in currency values can influence the dollar amount of holdings in euros, pounds, and other currencies. When reporting total reserves, the central bank converts these holdings into U.S. dollars. Consequently, movements in major exchange rates can cause reported reserve balances to fluctuate even if the underlying foreign currency assets stay the same.
Securities and foreign deposits fuel August’s record increase
Foreign securities remained the largest part of South Korea’s foreign exchange reserves, rising by $7.07 billion in August to reach $387.07 billion, which accounts for 87.5% of total reserves. This category includes government and corporate securities held among official reserve assets. Foreign currency deposits also saw a significant jump, increasing by $7.17 billion to $30.30 billion, representing a substantial share of the overall rise along with the growth in foreign securities.
Smaller changes appeared in other reserve components. Special drawing rights grew by $60 million to $15.77 billion, while the country’s reserve position was approximately $4.34 billion. Gold holdings remained steady at $4.79 billion. Collectively, securities and foreign currency deposits accounted for nearly all of the $14.33 billion increase in August. As a result, the reserve structure remained predominantly centered on securities, even as deposits experienced one of the largest increases among individual components during the month.
Reserves Reach Their Highest Level Since May 2022
The August total was South Korea’s highest in over four years. The reserves last exceeded this level in May 2022, when they reached $447.71 billion. The August figure also narrowed the gap with the record set in October 2021. Official foreign exchange reserves comprise securities, deposits, gold, special drawing rights, and the country’s reserve position in the international monetary system. These figures are published monthly as part of regular reports on the nation’s external financial assets.
Recent data reflect a notable shift in the pace of reserve growth during the summer months. After modest increases in June and July, August delivered a historic monthly jump. South Korea finished August with $442.28 billion in foreign exchange reserves, about $14.3 billion higher than in July. Although still below the all-time peak, this remains the highest level since May 2022, supported by increases in securities, foreign currency deposits, and the dollar valuation of select reserve assets.