“Effect of measures to mitigate volatility in the foreign exchange market… National Pension Service foreign exchange”
“Active market stabilization measures will be implemented if the exchange rate trend intensifies”
As the foreign exchange authorities ended foreign exchange with the National Pension Service to stabilize the win/dollar exchange rate and release the dollar to the market, foreign exchange reserves fell by about $2.76 billion in one month.
According to the statistics of foreign exchange reserves released by the Bank of Korea on the 3rd, at the end of October, foreign exchange reserves were $ 141.01 billion.
It was down $2.76 billion since the end of September ($416.7 billion).
Foreign exchange funds, after running downhill for four months since March, rebounded in July, but fell for three consecutive months in August, September and October.
In particular, there was a drop of $19.66 billion in foreign currency reserves in one month in September, the biggest drop since October 2008 (a drop of $27.4 billion) during the financial crisis.
According to the BOK, the conversion of foreign currency deposits and foreign currency assets of financial institutions to US dollars increased, but decreased due to the impact of measures to mitigate volatility in the foreign exchange market.
A BOK official said, “In October, as the concentration of the foreign exchange market eased compared to September, the number of measures to mitigate volatility decreased significantly.” It has contributed to improving conditions. “
“The reduction in foreign currency reserves also includes the temporary effect of the foreign currency exchange with the National Pension Service,” he said.
Previously, the National Pension Service signed a foreign exchange swap contract to acquire the necessary dollars for foreign investment from the BOK up to a limit of 10 billion dollars by the end of this year.
When foreign exchange reserves are broken down by asset, securities such as government bonds and corporate bonds ($362.35 billion) fell $17.06 billion from a month ago.
However, deposits ($28.29 billion) increased by $14.1 billion.
Special drawing rights (SDR, $14.31 billion) and the ‘IMF position’ ($4.26 billion), a convertible drawing right to the International Monetary Fund (IMF), also increased by $160 million and $30 million, respectively. .
Gold was recorded at $4.79 billion, the same as the previous month, as it does not reflect the market price and shows the price at the time of purchase.
China had the largest share with $3.29 trillion, followed by Japan ($1.23 trillion), Switzerland ($892.1 billion), Taiwan ($541.1 billion) and Russia ($540.7 billion).
A BOK official said, “In the future, if the won/dollar exchange rate deviates too much from the fundamentals of the Korean economy and major currency movements, and the concentration phenomenon intensifies, we intend to take active measures to stabilize the market. “