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S.Korea Sept FX reserves post second-biggest monthly decline on record

Published 10/05/2022, 05:03 PM
Updated 10/05/2022, 05:08 PM
© Reuters. FILE PHOTO: A South Korea won note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

© Reuters. FILE PHOTO: A South Korea won note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

SEOUL (Reuters) - South Korea's foreign exchange reserves shrank by nearly $20 billion in September, the second-biggest monthly drop on record, as authorities stepped up dollar-selling intervention to counter the won's slump to a 13-1/2-year low.

The country's FX reserves stood at $416.77 billion at the end of September, down $19.66 billion from $436.43 billion a month earlier, the Bank of Korea said on Thursday.

While still among the largest in the world, the country's reserves fell to the lowest level since end-July 2020 and saw the second-biggest monthly decrease on record after a $27.42 billion decline in October 2008. Reserves have fallen in nine out of the last 11 months.

© Reuters. FILE PHOTO: A South Korea won note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

The central bank cited measures to ease volatility in the foreign exchange market, an apparent reference to dollar-selling intervention, as a factor that contributed to the losses, along with declines in the converted value of non-dollar assets and financial institutions' foreign currency deposits.

The won ended September with a monthly loss of 6.5% against the dollar, the fastest in 11 years, after touching the weakest level since March 2009, while the U.S. dollar index rose 3.2%.

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