Foreign Reserves Hit Record High in Jan.
By Kim Jae-won
Staff Reporter
Korea's foreign exchange reserves hit a record high of $273.7 billion in January as investment income increased, up $3.7 billion from December, the Bank of Korea (BOK) said Tuesday.
The reserves rebounded in one month after they fell to just $270 billion in December from November.
Investment income on foreign reserves and the $400 million-repayment by the National Pension Service to the BOK as part of its currency swap arrangement with the central bank increased the reserves, a BOK official said.
However, the official declined to make public the size of investment income.
"We reaped some gains by managing foreign reserves, but cannot reveal them because it is confidential," Moon Han-geun of the central bank said.
Moreover, the BOK is estimated to have bought dollars to stop the Korean won from further strengthening as concerns have been growing that a strong Korean currency could hurt exports.
Securities occupy most of the foreign reserves at 87.3 percent, or $238.9 billion, followed by deposits with $30 billion (11 percent), special drawing rights (SDR), IMF reserve positions and gold.
The securities include government bonds, government agency bonds, international organization bonds and financial debentures.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. The SDRs can be exchanged for freely usable currencies.
The IMF reserve position is the liquid claims of members on the international fund.
In January, Korea boasted the sixth-largest foreign exchange reserves in the world. China has the largest with $2.4 trillion, followed by Japan with $1.1 trillion, Russia, Taiwan and India.
Analysts said that the reserves are sufficient to cover any liquidity crisis.
"It is good to have sufficient reserves because it increases liquidity. I think the current foreign exchange is enough to be prepared for a possible liquidity crisis," Kwon Soon-woo, senior economist at the Samsung Economic Research Institute, said.