South Korea Foreign-Exchange Reserves Hit Record August Gain

The Bank of Korea reported a record monthly increase of $14.33 billion in foreign-exchange reserves for August, bringing the total balance to $442.28 billion. This represents the largest single-month gain since the central bank began compiling data in 1971 and the highest overall reserve level since May 2022.

The surge was primarily driven by a $7.17 billion increase in foreign-currency deposits from financial institutions and a $7.07 billion rise in foreign securities, including corporate and sovereign bonds. The bank also noted gains from investment income and valuation increases on overseas assets, which were aided by a weakening U.S. dollar.

This growth strengthens the financial buffers of South Korea following a period of capital outflows and won volatility earlier in the year.