Foreign currency deposits at banks in South Korea dropped to the lowest level in over 20 months in January, central bank data showed Wednesday, amid a mass outflow of foreign capital.

Outstanding foreign currency deposits held by local residents came to $55.6 billion as of end-January, down $2.93 billion from the previous month, according to the data from the Bank of Korea.

The January tally marks the lowest reading since $51.1 billion posted in March 2014. From a year earlier, it marks a 12 percent plunge.

Local residents include firms and foreign nationals who have stayed in the country for more than six months. The figure excludes inter-bank foreign currency deposits.

The drop in January was largely attributed to a cut in corporate holdings.

Foreign currency deposits held by companies here plunged $2.27 billion from the previous month in January, while those held by individuals shrank $660 million on-month.

"Dollar deposits dropped by a large margin due to an increase in withdrawals by companies for import-export related payments," the BOK said in a press release.

The on-month cut, however, also accompanies a mass outflow of foreign capital, apparently sparked by a recent U.S. rate hike that marked the first of its kind in nearly a decade.

Foreign investors dumped more than 6 trillion won ($4.9 billion) worth of South Korean shares over what has been recorded as their longest selling streak of 37 consecutive sessions between Dec. 2 and Jan. 26.

At the end of January, U.S. dollar-denominated deposits came to $44.16 billion, down $3.09 billion from a month earlier. Chinese yuan-denominated deposits dropped $280 million on-month to $4.4 billion. (Yonhap)