An employee holds up dollar bills at Hana Bank's Counterfeit Notes Response Center in Jung District, central Seoul, on Jan. 6. [NEWS1]

An employee holds up dollar bills at Hana Bank’s Counterfeit Notes Response Center in Jung District, central Seoul, on Jan. 6. [NEWS1]

 

Korea’s foreign exchange reserves fell out of the world’s top 10 for the first time since 2000, as authorities tapped reserves to defend the won amid a prolonged period of dollar strength.

 

The decline marked the steepest monthly drop in 11 months and reflected valuation losses as a stronger dollar reduced the value of assets held in other currencies.

 


 

The country’s reserves stood at $423.66 billion at the end of last month, down $3.97 billion from a month earlier, the Bank of Korea (BOK) said Friday. Compared with other countries, Korea’s reserves ranked 12th in the world as of the end of February, at $427.6 billion.

 

At the time, the authorities intervened to stabilize the currency after the U.S. announced reciprocal tariffs, which weakened the won and pushed reserves to their lowest level in five years.

 

“The drop happened mainly because the U.S. dollar got stronger in March, which lowered the value of assets held in other currencies when converted into dollars,” a BOK official said. “The government also used some reserves to stabilize the foreign exchange market, including currency swap deals with the National Pension Service.”

 

Although reserves increased by $1.7 billion in February from the previous month, Italy and France overtook Korea. The BOK attributed this to rising gold prices. Korea calculates its reserves based on the acquisition cost of gold, while Italy and France reflect gold at market prices. The two countries rank third and fourth in global gold holdings, respectively.

 

China held the largest amount of foreign exchange reserves at $3.43 trillion, followed by Japan with $1.41 trillion, Switzerland with $1.11 trillion, Russia $809.3 billion, India $728.5 billion, Germany $663.3 billion, Taiwan $605.5 billion, Italy $501.2 billion, France $495 billion, Saudi Arabia $476.3 billion and Hong Kong $439.3 billion.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY OH HYO-JEONG [[email protected]]