Dollar-denominated deposits in South Korea hit a record high at the end of June, driven by a rise in corporate export receipts amid growing exports.
The Bank of Korea's "Resident Foreign Currency Deposit Trends" report, released Monday, showed the total balance of resident foreign-currency deposits held at foreign exchange banks stood at $113.33 billion at end-June, up $1.08 billion from end-May.
Resident foreign-currency deposits cover foreign-currency deposits held domestically by Korean nationals, domestic companies, foreigners who have resided in Korea for at least six months, and foreign companies operating in the country. The end-June balance was the highest in four months, since the end-February reading of $117.53 billion.
The balance had fallen by $15.37 billion from the previous month to $102.17 billion at end-March, before rebounding by $8.51 billion to $110.68 billion at end-April and rising a further $1.57 billion at end-May.
By currency, the increase was led by dollar-denominated deposits and corporate deposits.
The dollar deposit balance rose by $2.25 billion over the month to $97.8 billion, the highest since the Bank of Korea began compiling the data in June 2012. The central bank said customer deposits at securities firms — including margin deposits for exchange-traded derivatives and custody deposits for overseas securities investment — increased, and that large conglomerates received substantial current-account payments, which contributed significantly to the rise.
Euro-denominated deposits ($5.84 billion) and yen-denominated deposits ($7.12 billion) fell by $460 million and $410 million, respectively. Yen deposits declined due to current-account payments, while euro deposits fell as some companies repaid loans.
By depositor type, corporate deposits ($98.99 billion) rose by $1.58 billion, while individual deposits ($14.33 billion) fell by $500 million.
Corporate dollar deposits reached a record $85.58 billion, up $2.59 billion from the previous month. Individual dollar deposits, meanwhile, fell by $350 million to $12.22 billion.
The Bank of Korea noted that the won-dollar exchange rate was elevated in June, adding that individuals typically sell dollars when the rate is high. The average exchange rate in June, based on weekly closing prices, was 1,527.9 won per dollar — the third highest on record, after January 1998 (1,701.5 won) and February 1998 (1,626.8 won) during the Asian financial crisis.
By institution, resident foreign-currency deposits at domestic banks totaled $92.78 billion, up $50 million, while branches of foreign banks held $20.55 billion, an increase of $1.03 billion.
kimstar@heraldcorp.com
