South Korea’s foreign exchange reserves have fallen out of the top 10 globally for the first time since 2000. This shift comes as authorities tapped into reserves to support the won amid the dollar’s prolonged strength.
The decline marks the largest monthly drop in 11 months, largely influenced by the dollar’s dominance, which has diminished the value of assets in other currencies.
The Bank of Korea (BOK) reported on Friday that the nation’s foreign exchange reserves stood at $423.66 billion at the end of last month, a decrease of $3.97 billion from the prior month. In comparison, South Korea ranked 12th in foreign exchange reserves globally, having recorded $427.6 billion at the end of February.
In that period, authorities intervened to stabilize the currency following the U.S. announcement of reciprocal tariffs, which resulted in the won’s depreciation and brought reserves to their lowest level in five years.
A BOK official noted, “The decrease was primarily a result of the U.S. dollar’s appreciation in March, which lowered the value of assets in other currencies when converted.” He added that the government also utilized some reserves to stabilize the foreign exchange market, including engaging in currency swap agreements with the National Pension Service.
While foreign exchange reserves had increased by $1.7 billion in February compared to January, South Korea has now been surpassed by Italy and France. The BOK attributed this change to rising gold prices. It’s worth mentioning that South Korea values reserves based on the acquisition cost of gold, whereas Italy and France reflect the current market price. Both countries now rank third and fourth in global gold holdings.
Globally, China leads with the largest foreign exchange reserves at $3.43 trillion, followed by Japan with $1.41 trillion, Switzerland at $1.11 trillion, Russia at $809.3 billion, India and Germany each holding $728.5 billion, and Taiwan with $663.3 billion. Other notable figures include Italy at $501.2 billion, France at $495 billion, Saudi Arabia at $476.3 billion, and Hong Kong at $439.3 billion.
