FX reserve declines for 3 months

The Bank of Korea announced Monday that the nation's foreign exchange reserve declined by as much as US$180 million to US$92.35 billion as of Oct. 15.

Officials of the bank said that it is because of the reduction in the appraisal value of Korea's foreign currency assets in yen and euros in line with their weaker value against the U.S. dollar.

They noted that the sharp reduction in the current-account surplus and net inflow of foreign capital for investment in stocks did not affect the reduction in the nation's foreign exchange reserves. However, if such a trend continues, it would affect foreign exchange reserve, they said.

Korea's foreign exchange reserve stood at US$90.11 billion as of July 15, showing a reduction of US$70 million from June's US$90.18 billion. It was the first such decline since the outbreak of the foreign exchange crisis in 1997.

However, the reserve increased to US$91.43 billion at the end of August and US$92.53 billion at the end of September.

Park Hyeon-Jin witness@donga.com