S.Korea's Foreign Reserves Keep Record-breaking Trend in Nov.
    2012-12-05 10:36:17     Xinhua      Web Editor: Wang Wei
South Korea's foreign currency reserves maintained their record-breaking trend for four straight months in November amid the persistent current account surplus, central bank data showed Wednesday.
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South Korea's foreign currency reserves maintained their record-breaking trend for four straight months in November amid the persistent current account surplus, central bank data showed Wednesday.

Bank of Korea (BOK) lifted its gold holdings by 14 tons last month in a bid to diversify its foreign reserves.

Foreign reserves reached a fresh monthly high of 326.09 billion U.S. dollars as of the end of November, up from the previous record high of 323.46 billion dollars for October, according to the BOK.

The reserves topped the prior high for four months in a row last month, and stayed above the 300-billion-dollar level since April 2011 when it rose above the level for the first time in the country's history.

The 300-billion-dollar mark has been viewed as the psychologically-important level to protect the local financial market from potential foreign capital exodus from the country that may come from possible financial shocks.

The BOK attributed the November growth to a rise in investment returns that offset a reduction in conversion value of non-dollar denominated assets. The European single currency appreciated 0.1 percent against the U.S. dollar last month, but the British pound and the Japanese yen depreciated 0.3 percent and 3.1 percent each.

Meanwhile, the BOK bought 14 tons in gold bullion last month. The purchase raised the bank's gold holdings to 84.4 tons that was equivalent to 1.2 percent of its total foreign reserves as of end-November, up from 0.9 percent for October.

The gold purchase came in four months since July when the central bank bought 16 tons in global bar. The BOK bought a total of 40 tons in gold bullion in 2011. "The gold purchase will lessen the investment risk of foreign reserves due to the diversification effect. With gold holdings, the central bank can respond to the change in the global financial market conditions in a more effect way,"the central bank said in a statement.

Among global central banks, the BOK was estimated to rank 36th in terms of gold holdings at the end of last month, up four notches from two months before.

The country's foreign reserves consisted of 299.03 billion dollars of securities, 17 billion dollars of deposits, 3.52 billion dollars of special drawing rights (SDR), 2.78 billion dollars of International Monetary Fund (IMF) positions and 3.76 billion dollars of gold bullion.

As of the end of October, South Korea was the world's seventh- largest holder of foreign reserves following China, Japan, Russia, Switzerland, China's Taiwan and Brazil.

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