South Korea's foreign exchange reserves shrank in May for a third consecutive month, reaching the lowest level in 14 months because of dollar-selling intervention to support the local currency, the central bank said on Tuesday.
The foreign exchange reserves of Asia's fourth-largest economy had fallen to $447.71 billion by the end of May, the lowest since the end of March 2021, from $449.30 billion a month earlier, the Bank of Korea said.
It cited “measures to ease volatility in the foreign exchange market” as the main reason for the decline, saying the reserves might have increased in U.S. dollar terms, as the dollar had weakened against major currencies in the month.
It did not disclose the scale of the intervention.
The won fell in early May, reaching a 26-month low versus the dollar on May 12, then rebounded to eventually end the month 1.67% stronger than at the end of April.
In dollar terms, South Korea had held the world's ninth largest foreign reserves at the end of April, the central bank said.
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