Residents' foreign currency deposits decline in December

(Yonhap)

Foreign currency deposits at banks in South Korea declined in December as companies reduced foreign currency holdings for investment, central bank data showed Thursday.

According to the data from the Bank of Korea (BOK), outstanding foreign currency-denominated deposits held by residents came to $97.27 billion as of end-December, down $5.75 billion from a month earlier.

Residents include local citizens, foreigners staying here for more than six months and foreign companies. The data excludes interbank foreign currency deposits.

The decline came as companies withdrew their foreign deposits, mostly dollar-denominated holdings, to secure funds for investment.

Their foreign currency holdings totaled $78.5 billion, down $6.02 billion from a month earlier, the data showed.

Individuals, meanwhile, increased their foreign currency deposits by $270 million over the same period.

The rise is attributed to growing expectations that the dollar will gain further ground down the road as the U.S. Federal Reserve will speed up rate hikes, a BOK official said. (Yonhap)