The government urged export corporations to convert their U.S. dollars into won to defend the strong dollar, but the balance of foreign-currency deposits held domestically increased by more than $15 billion. It was the largest amount since June 2012, when related statistics began to be compiled.
According to the "December resident foreign-currency deposits trends" released by the Bank of Korea on the 26th, the balance of foreign-currency deposits at the end of last month was $119.43 billion. That was up $15.88 billion from the previous month. Dollar deposits increased by $8.34 billion, euro deposits by $6.35 billion, and yen deposits by $870 million.
Korea's foreign-currency deposits fell by $550 million in September last year and by $5.26 billion in October, then began to rebound in November. Foreign-currency deposits increased by $1.72 billion in November and rose sharply again in December, the following month. Foreign-currency deposits tend to increase when market participants expect the dollar's value to rise.
By depositor, corporations' foreign-currency deposits stood at $102.5 billion, up $14.07 billion from the previous month. Individuals' foreign-currency deposits also increased by $1.82 billion to $16.93 billion. The Bank of Korea said, "Dollar deposits increased as current payments by import-export corporations and investors' margin deposits at securities firms were deposited."
Meanwhile, $2 billion of the increase in dollar deposits was due to Korea Zinc's paid-in capital increase for Crucible JV, a U.S. joint venture involving the U.S. government.