South Korea’s FX reserves drop amid won support

South Korea’s foreign exchange reserves posted their largest monthly drop in 11 months in March, declining by nearly $4 billion as authorities acted to steady the won against a stronger U.S. dollar. Figures released on April 3 by the Bank of Korea showed reserves at $423.66 billion at the end of March, down $3.97 billion from a month earlier.

The central bank said the decline reflected both valuation effects and policy measures. A stronger dollar reduced the converted value of non-dollar assets, while steps to stabilize the foreign exchange market, including transactions involving the National Pension Service and currency swap arrangements, also weighed on reserves.

The March drop was the largest since April last year, when reserves fell by $4.99 billion. At the time, U.S. President Donald Trump’s announcement of sweeping reciprocal tariffs drove the won sharply lower, prompting heavy intervention that pushed reserves to their lowest level in five years.

Pressure on reserves may persist into April, with the exchange rate holding in the 1,500 won range amid tensions in the Middle East. Higher global oil prices, coupled with currency weakness, are also raising concerns that consumer inflation could accelerate in the coming months.


최미송기자 cms@donga.com