South Korea's foreign reserves fall to $440.56b in September

South Korea's foreign exchange reserves shrank for the first time in four months in September, dragged down in part by a decline in foreign currency deposits held by financial institutions.

The Bank of Korea said Saturday that the country's foreign reserves stood at $440.56 billion at the end of last month, down $1.72 billion from $442.28 billion at the end of August. The reserves had been rising since June before reversing course last month.

The August figure had itself marked a record monthly gain — rising $14.33 billion from $427.95 billion at the end of July, the largest increase since the statistics were first compiled.

The central bank attributed the September decline mainly to a drop in foreign currency deposits at financial institutions, an asset transfer to a Korea-US strategic investment corporation, and a decrease in the dollar-converted value of foreign assets held in other currencies — despite positive investment returns.

By asset type, deposits — a cash-equivalent category — fell $350 million to $22.95 billion, from $30.3 billion the previous month. Securities, including US government bonds, government agency bonds and corporate bonds, declined $1.05 billion to $386.03 billion over the same period.

Special drawing rights, the IMF's reserve asset, fell $290 million to $15.48 billion, while the IMF reserve position dropped $40 million to $4.3 billion. Gold holdings were unchanged at $4.79 billion.