Foreign currency deposits in S. Korea fall to 22-month low

Foreign currency deposits in South Korea declined to the lowest in 22 months due to soft demand for Chinese yuan deposits and withdrawal of U.S. dollars for settlements, central bank data showed Wednesday.

Deposits denominated in foreign currencies, held by local residents, came to 55.6 billion U.S. dollars as of end-January, down 2.93 billion dollars from a month earlier, according to the Bank of Korea (BOK).

It marked the lowest since March 2014, keeping a downward trend for three months in a row. Local residents include South Koreans as well as foreigners and foreign companies having stayed here for more than six months.

The dollar deposits tumbled 3.09 billion dollars from a month earlier to 44.16 billion dollars as of end-January, posting the lowest in four months. South Korean companies withdrew dollar funds to settle energy imports, while exporters refrained from the depositing of export proceeds into bank accounts.

Demand for Chinese yuan deposits weakened due to narrow differences both between deposit rates and foreign exchange rates in South Korea and China.

Deposits denominated in the Chinese currency stood at 4.4 billion dollars as of end-January, down 0.28 billion dollars from a month earlier. It was the lowest in more than two years.

Euro deposits grew 0.49 billion dollars from a month earlier to 2.63 billion dollars in January, but those for the Japanese yen shrank 0.16 billion dollars to 3.21 billion dollars. Enditem