Foreign currency deposits rise for 3rd month in June

Lead

Foreign currency deposits held by South Korean residents rose for the third consecutive month in June, buoyed by increased dollar savings, central bank data showed Monday. Outstanding foreign currency-denominated deposits stood at US$113.33 billion at the end of June, up $1.08 billion from the previous month, according to the Bank of Korea (BOK). The reading has been on an upward trend since April.

Coverage Comparison

The reporting from Yonhap News Agency, South Korea's leading wire service, provides two distinct but related economic indicators. The first article, published July 27, focuses on the June foreign currency deposit figures, detailing changes by currency and sector. The second article, dated July 15, covers the May money supply data, highlighting the sharpest monthly gain in nine months. Both reports draw on preliminary data from the BOK and offer a neutral, data-driven presentation of the findings.

Key Claims

• Foreign currency deposits rose in June: Outstanding foreign currency-denominated deposits held by residents increased by $1.08 billion to $113.33 billion at the end of June, according to BOK data reported by Yonhap. This marks the third consecutive monthly rise.
• U.S. dollar deposits increased: Dollar-denominated deposits rose by $2.25 billion to $97.8 billion, also growing for the third straight month. In contrast, euro-denominated deposits fell by $460 million to $5.84 billion, and Japanese yen deposits declined by $410 million to $7.12 billion.
• Corporate holdings rose, individual holdings fell: Corporate foreign currency deposits increased by $1.58 billion to $98.99 billion, while individual holdings dropped by $500 million to $14.33 billion.
• BOK attributed the increase to specific factors: The central bank linked the rise in dollar deposits to higher basic deposits required for derivatives trading amid stock market volatility, as well as increased dollar receipts by exporting companies.
• Money supply grew in May: South Korea's M2, a broad measure of the money supply, rose by 0.8% (32.2 trillion won) to 4,184.4 trillion won in May compared with a month earlier, marking the sharpest on-month gain since August last year. The increase was driven by short-term deposits and funds awaiting investment amid a rally in the local stock market, according to the BOK.
• Sectoral liquidity changes: Liquidity increased by 30.1 trillion won among nonfinancial corporations and 11.8 trillion won among financial institutions, while liquidity held by households and nonprofit organizations fell by 19 trillion won in May.

Perspectives

The BOK's official statements, as reported by Yonhap, attribute the rise in foreign currency deposits to concrete economic activities: increased basic deposits for derivatives trading due to stock market volatility and higher dollar receipts from exporters. This explanation frames the trend as a response to market conditions rather than a speculative shift. Additionally, the central bank's data on money supply growth points to a stock market rally as a driver of short-term deposit inflows. These official attributions provide a single, authoritative viewpoint on the underlying causes of the observed trends, and no alternative interpretations are presented in the material.