South Korea’s foreign exchange reserves decreased by more than $1.7 billion in a single month, returning to a downward trend after four months.

The decline was driven by a decrease in foreign currency deposits held by financial institutions and asset consignments to the Korea-U.S. Strategic Investment Corporation. However, the total foreign exchange reserves managed to maintain the $440 billion range.

According to the "Foreign Exchange Reserves as of the End of September 2026" released by the Bank of Korea on the 6th, foreign reserves stood at $440.56 billion at the end of last month, down $1.72 billion from the previous month's $442.28 billion ($442.28 billion).

Although foreign reserve investment returns were generated, they were offset by a reduction in financial institutions' foreign currency deposits, asset consignments to the Korea-U.S. Strategic Investment Corporation, and a decrease in the U.S. dollar conversion value of other currency-denominated foreign assets. Future additional consignment amounts and schedules for the Korea-U.S. Strategic Investment Corporation have not yet been determined.

In September, the U.S. dollar strengthened, reducing the dollar conversion value of foreign assets held in currencies such as the euro and the British pound. The Dollar Index (DXY), which measures the greenback's value against six major currencies, rose 1.7% from 99.70 at the end of August to 101.37 at the end of September.

Against the dollar, the Australian dollar fell by 2.4%, the British pound by 2.3%, and the euro by 2.1%. Conversely, the Japanese yen rose by 1.8%.

By asset category, marketable securities—including government bonds, government agency bonds, and corporate bonds—decreased by $1.05 billion from the previous month to $386.03 billion. Deposits fell by $350 million to $29.95 billion. The decline in these two asset classes accounted for the majority of the total drop in foreign reserves.

Special Drawing Rights (SDRs) decreased by $290 million to $15.48 billion, and the IMF position fell by $40 million to $4.3 billion. Gold holdings remained unchanged at $4.79 billion.

Marketable securities accounted for the largest share of total foreign reserves at 87.6%. Deposits made up 6.8%, SDRs 3.5%, gold 1.1%, and the IMF position 1.0%.

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