S. Korea's Forex Reserves Rally to USD427.62B in February

(MENAFN) South Korea's foreign exchange reserves staged a recovery in February, snapping a two-month losing streak on the back of strong investment returns and a fresh round of government bond issuances, official central bank figures showed Thursday.

Reserves swelled by 1.72 billion U.S. dollars from the previous month to reach 427.62 billion dollars at the end of February, according to data published by the Bank of Korea.

The reversal was driven by two key factors: healthy returns on existing investments and the issuance of foreign exchange stabilization bonds — government-issued instruments specifically designed to raise capital for the purpose of keeping exchange rates in check.

A breakdown of the country's total reserves reveals that securities formed the largest share at 379.96 billion dollars, followed by deposits at 22.49 billion dollars. Special drawing rights accounted for 15.77 billion dollars, while gold bullion holdings stood at 4.79 billion dollars and the nation's IMF reserve position contributed a further 4.61 billion dollars.

Despite the month-on-month recovery, South Korea's standing in the global rankings edged slightly lower. The country occupied the position of the world's 10th-largest foreign reserve holder as of the end of January, sliding one place compared to the prior month.

The rebound offers a measure of reassurance to policymakers, as ample foreign reserves are considered a critical buffer against currency volatility and external economic shocks.

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