S. Korea's FX reserves shrink by nearly $20 billion

S. Korea's FX reserves shrink by nearly $20 billion

In September, South Korea's foreign exchange reserves shrank by nearly $20 billion, the second biggest monthly drop on record, as authorities increased dollar-selling intervention to counter the won's slump to a 13 -- 1 2 year low.

The country's FX reserves were $416.77 billion at the end of September, down $19.66 billion from $436.43 billion a month earlier, the Bank of Korea said on Thursday.

While still among the largest in the world, the country's reserves fell to the lowest level since July 2020 and saw the second-biggest monthly decrease after a $27.42 billion decline in October 2008. Reserves have fallen nine out of the last 11 months.

The central bank cited measures to ease volatility in the foreign exchange market, a reference to dollar-selling intervention, as a factor that contributed to the losses, along with declines in the converted value of non-dollar assets and financial institutions' foreign currency deposits.

The month's loss was 6.5 per cent against the dollar, the fastest in 11 years, after touching the weakest level since March 2009, while the U.S. dollar index rose 3.2 per cent.