Why did BOK suddenly stop disclosing its FX reserve ranking?

The Bank of Korea (BOK) has decided to stop disclosing Korea's ranking among major countries by foreign exchange reserves on Thursday, ending a practice that had continued for more than 25 years.

In its monthly report on foreign exchange reserves released Thursday morning, the central bank left out the section showing Korea's ranking among major countries, a figure it had routinely included in its releases.

It was the first time since February 2001 that the BOK had omitted Korea's global ranking from its monthly report, ending a practice that began after the country recovered from the 1997-98 Asian financial crisis.

The central bank first began publishing the names and reserve holdings of the world's top 10 countries in February 2001.

Foreign exchange reserves have long been viewed as a key indicator of Korea's ability to meet external payment obligations, making the ranking a closely watched measure among market watchers both home and abroad.

The decision to remove the data raised eyebrows, particularly as the central bank initially did not give any explanation for the change.

"The ranking will not be included in our monthly releases going forward," a BOK official said, adding that foreign exchange reserve data by countries is still available through the International Monetary Fund's database.

The BOK is said to have recently reviewed whether continuing to publish the ranking was still useful, as Korea's position fluctuated more frequently this year.

Korea ranked ninth as of the end of last year, but slipped to 10th in January and 12th in February. By the end of May, it had fallen to 13th before rebounding to 10th in June, a three-place jump within one month.

The earlier decline was partly attributed to the authorities' use of foreign exchange reserves to prop up the won as the won-dollar exchange rate climbed to its highest level since the global financial crisis.

The BOK later said it decided to remove the ranking because it had often been interpreted in ways that did not accurately reflect the fundamentals of the external sector.

"We felt the need for a correction because the ranking has changed frequently this year, partly due to fluctuations in gold prices, and has often been interpreted in ways that are disconnected from the fundamentals of the external sector," the central bank said in a statement.

The BOK said the country's external financial soundness had remained stable, despite the frequent changes in the ranking.

According to central bank data, foreign reserves stood at $442.28 billion as of the end of August, up $14.33 billion from a month earlier. The reserves have increased for three consecutive months since June, but still remain about $40 billion below the record $469.21 billion reached in October 2021.