Foreign Exchange Reserves Rise to $201.2 Billion

South Korea's foreign exchange reserves rose in December for the first time in nine months as a weaker U.S. dollar boosted the dollar value of assets in other currencies, the central bank said Monday.

The nation's foreign reserves totaled $201.22 billion as of the end of December, up $720 million from a month earlier, Yonhap News reported quoting the Bank of Korea (BOK).

Foreign reserves consist of securities and deposits denominated in overseas currencies along with International Monetary Fund reserve positions, special drawing rights and gold bullion.

The country's foreign reserves had declined for the eighth straight month in November as the foreign exchange authorities tapped their dollar holdings to bolster the sliding local currency and ease a dollar crunch.

"Despite a dollar liquidity supply by foreign exchange authorities to ease market jitters, the foreign reserves rose last month due to higher investment profits and a rise in the dollar conversion value of non-dollar assets, including the euro," Ha Keun-cheol, an official at the BOK, was quoted as saying.

"Given an expected annual surplus of the current account and eased sell-offs of stocks by foreigners, it is fair to say that jitters over dollar liquidity shortages would be eased although the amount of the foreign reserves itself could face some fluctuations."

South Korea has been posting a current account surplus since October and is expected to post a surplus of around $22 billion this year, according to the central bank.

On Oct. 30, the BOK announced a $30 billion currency swap agreement with the U.S. Federal Reserve, tapping $10.4 billion out of the swap line so far. The use of the swap facility helped ease fears about the declining foreign reserves. The Korean currency fell 25.7 percent to the dollar last year alone, becoming one of the world's worst-performing currencies.

The BOK said the government and the central bank have pumped a combined $37.7 billion into the financial system since October out of a planned $55 billion. In December alone, they supplied $5.8 billion, the BOK added.

As of the end of November, South Korea was the world's sixth-largest holder of foreign exchange reserves after China, Japan, Russia, Taiwan and India.