South Korea's foreign exchange reserves declined by $880 million in a single month, with the Bank of Korea (BOK) attributing the drop mainly to market stabilization measures including a currency swap arrangement with the National Pension Service (NPS).
According to the "End-May 2026 Foreign Exchange Reserves" report released by the Bank of Korea on Wednesday, foreign reserves stood at $426.99 billion at the end of last month, down $880 million from $427.88 billion at the end of the previous month.
The decline was primarily driven by foreign exchange market stabilization measures, including currency swap transactions with the NPS. The reduction is interpreted as resulting from the NPS sourcing dollars needed for overseas investments through swap arrangements with the central bank.
By asset class, securities holdings amounted to $380.68 billion, down $3.39 billion from the previous month. Deposits, on the other hand, rose by $2.59 billion to $21.35 billion. Special Drawing Rights (SDRs) at the International Monetary Fund (IMF) decreased by $30 million to $15.78 billion, while the IMF reserve position fell by $60 million to $4.4 billion. Gold holdings remained unchanged at $4.79 billion.
Securities accounted for the largest share of total foreign reserves at 89.2 percent, followed by deposits (5.0 percent), SDRs (3.7 percent), gold (1.1 percent) and the IMF position (1.0 percent).
Meanwhile, South Korea retained its position as the world's 12th-largest holder of foreign reserves as of the end of April 2026. China ranked first with $3.4105 trillion, followed by Japan ($1.3830 trillion), Switzerland ($1.0823 trillion), Russia ($758.7 billion) and India ($690.7 billion). Korea ranked 12th, behind Hong Kong ($442.1 billion).
