BOK expands dollar share of foreign exchange reserves in 2015

Korea's central bank increased the portion of U.S. dollar-denominated assets in its foreign exchange reserves from a year earlier in 2015 amid the strengthening of the U.S. greenback, the Bank of Korea (BOK) said Thursday.

In its annual policy report, the BOK said its dollar-denominated holdings accounted for 66.6 percent of its overall foreign reserves at the end of 2015, up 4.1 percentage points from 62.5 percent a year earlier.

 "The BOK expanded the portion of U.S. dollar-holdings in its portfolio of foreign assets on steady growth of the U.S. economy and market expectations for a rate hike by the U.S. Federal Reserve," the report said.

As of end-2015, the country's overall foreign exchange reserves stood at $367.96 billion, up $4.36 billion from a year earlier.

With the rise in the portion of U.S. dollar assets, the share of assets denominated in other currencies, including the Chinese yuan, dropped to 33.4 percent last year, the lowest level in four years and down 4.1 percentage points from the previous year.

The BOK does not disclose details on foreign assets held in non-U.S. dollar currencies. Foreign exchange reserves consist of securities, including bonds, International Monetary Fund reserve positions, special drawing rights and gold bullion.

As of end-2015, the portion of BOK's foreign reserves invested in government bonds came to 35.7 percent, down 1.4 percentage points from a year prior, while the share of corporate bonds also retreated 1.1 percentage points to 16.4 percent.

The share of asset-backed securities slightly increased to 13.1 percent from 13 percent over the cited period, with the portion of securities also gaining 0.1 percentage points to 6.3 percent as of end-2015.

Meanwhile, the BOK said its net profit surged to a three-year high of 2.72 trillion won ($2.38 billion) last year, spiking 38.6 percent from the previous year.

The increase was largely attributed to a cut in costs, such as the interest paid on monetary stabilization bonds, it said. (Yonhap)