Foreign currency deposits held by domestic residents rebounded last month for the first time in four months, driven by factors including current-account receipts centered on large corporations.
According to the "April Resident Foreign Currency Deposit Trends" released by the Bank of Korea (BOK) on Tuesday, the balance of resident foreign currency deposits at foreign exchange banks stood at $110.68 billion as of the end of last month, an increase of $8.51 billion from the end of the previous month. It marked a return to growth for the first time in four months since December last year.
In particular, March had seen a record decline of $15.37 billion, driven by profit-taking demand on dollar strength and won conversions stemming from companies' corporate tax payment needs, before the rebound.
Resident foreign currency deposits refer to the combined domestic foreign currency deposits of Koreans and domestic companies, foreigners who have resided in Korea for six months or more, and foreign companies operating in Korea.
By currency, U.S. dollar deposits, which account for the largest share of resident foreign currency deposits, rose to $93.32 billion, up $7.68 billion from the previous month. It marked a return to growth for the first time in three months since January this year.
"The increase was driven by factors including a rise in securities firms' investor deposits, inflows of overseas investment funds executed by pension funds, and current-account receipts by large corporations," a BOK official said.
Yen deposits totaled $8.22 billion, up $400 million from the previous month, while euro deposits came to $6.57 billion, an increase of $260 million. Yen deposits rose on an increase in securities firms' investor deposits, while euro deposits grew on inflows of bond issuance funds from some companies. In fact, Naver issued 500 million euros in euro-denominated bonds with a seven-year maturity last month.
By entity, corporate deposits rose by $8.08 billion to $94.88 billion. Individual deposits came to $15.8 billion, up $430 million.
