Foreign reserves log sharpest drop in about year in March: Bank of Korea

Seoul, April 3 South Korea's foreign reserves posted their sharpest monthly decline in about a year in March amid a stronger dollar and authorities' efforts to manage exchange rate volatility, the central bank said on Friday.

The country's foreign reserves stood at US$423.66 billion as of end-March, down $3.97 billion from a month earlier, according to the data from the Bank of Korea (BOK).

It was the sharpest decline since April 2025, when the amount fell by $4.99 billion on-month, reports Yonhap news agency.

The reserves had fallen in December for the first time since June and continued to decline through January before rising in February.

"The U.S. dollar strengthened in March, reducing the dollar value of South Korea's foreign currency assets denominated in other currencies. Also attributable was market stabilisation measures, such as foreign exchange swaps with the National Pension Service," a BOK official said.

Foreign securities, including U.S. Treasuries, fell by $3.97 billion from a month earlier to $423.66 billion at end-March, accounting for 89.2 percent of the country's total foreign reserves.

The value of foreign currency deposits lost $1.44 billion to $21.05 billion, while special drawing rights (SDRs) fell by $200 million to $15.57 billion.

Gold bullion holdings remained unchanged at $4.79 billion.

The country's reserve position with the International Monetary Fund (IMF) decreased by $60 million from a month earlier to $4.55 billion at the end of March, the data showed.

South Korea ranked as the world's 12th-largest holder of foreign reserves as of end-February, down from tenth place a month earlier.

China topped the list, followed by Japan, Switzerland, Russia and India, according to the BOK.

"Though South Korea's foreign exchange reserves increased by $1.7 billion in February, some peer countries mark their gold holdings to market for comparison, and recent gains in gold prices have contributed to their higher rankings," the BOK official said.

Meanwhile, the South Korean won weakened against the U.S. dollar, following a sharp gain in the previous session, as U.S. President Donald Trump vowed to continue military operations against Iran, dampening hopes for an end to the monthlong conflict.

The won's weakening came after Trump said in a prime-time address earlier in the day that the United States would hit Iran "extremely hard over the next two to three weeks" and "bring them back to the Stone Age," without presenting a timeline for a ceasefire or an end to the war that began in late February.

Trump also renewed his call for countries that rely on the Strait of Hormuz for energy imports to "take care of" the key waterway, which has effectively been shut since the conflict began.

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