SEOUL: Foreign currency deposits at banks in South Korea tumbled to a 14-month low in August due mainly to an extended decline in Chinese yuan deposits, central bank data showed Tuesday. Outstanding foreign currency deposits held by local residents reached US$59.69 billion as of end-August, down $1.18 billion from the previous month, according to the Bank of Korea.
The August reading is the lowest since $58.95 billion posted in June 2014. It also marks the fourth straight month of decline. Residents include individual citizens, firms and foreign nationals who have stayed in South Korea more than six months. The data excludes inter-bank foreign currency deposits.
The sharp drop was attributed to a fall in yuan deposits, which sank to an 18-month low as local branches of Chinese lenders did not redeposit their maturing holdings due to unfavorable investment circumstances. Yuan deposits totaled $10.63 billion as of end-August, slumping $3.68 billion on-month and reaching the lowest level since $9.91 billion in April last year.
Deposits in the greenback rose for a third consecutive month but the gain was not sufficient to prop up the overall foreign currency deposits. They gained $2.28 billion to $42.71 billion as of end-August, the highest level since the central bank began compiling the data.
