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Korea’s foreign reserves hit new high in January

Feb. 7, 2011 - 18:48 By 황장진
Korea’s foreign exchange reserves rose to a fresh high in January as a soft U.S. dollar bolstered the conversion value of assets in other currencies, the central bank said Monday.

The country’s foreign reserves reached $295.96 billion as of the end of January, up $4.39 billion from the previous month, according to the Bank of Korea.

The reserves rose for the second straight month in January, surpassing the previous record high of $293.35 billion registered in October last year.

The foreign reserves have been on the rise as dollar inflows have increased amid robust exports and foreign investors’ sustained buying of Korean assets.

Foreign reserves consist of securities and deposits denominated in overseas currencies, along with International Monetary Fund reserve positions, special drawing rights and gold bullion.

“Amid a rise in investment profit, the reserves increased as gains in the euro and the pound boosted their dollar conversion value,” said Shin Jae-hyuk, an economist at the BOK.

“For now, it is hard to say when the reserve would hit the $300 billion mark as the value of non-dollar currencies sways due to unpredictable factors like the Egyptian unrest.”

In January, the euro rose 2.3 percent to the dollar on eased fears about the eurozone debt crisis and growing prospects for a potential rate increase in the region. The pound gained 2.7 percent to the greenback.

As of the end of December, Korea was the world’s sixth-largest holder of foreign exchange reserves after China, Japan, Russia, Taiwan and India. (Yonhap News)