Seoul: South Korea's foreign reserves posted their sharpest monthly decline in about a year in March amid a stronger dollar and authorities' efforts to manage exchange rate volatility, the central bank said Friday. The country's foreign reserves stood at US$423.66 billion as of end-March, down $3.97 billion from a month earlier, according to the data from the Bank of Korea (BOK).

According to Yonhap News Agency, it was the sharpest decline since April 2025, when the amount fell by $4.99 billion on-month. The reserves had fallen in December for the first time since June and continued to decline through January before rising in February. "The U.S. dollar strengthened in March, reducing the dollar value of South Korea's foreign currency assets denominated in other currencies. Also attributable was market stabilization measures, such as foreign exchange swaps with the National Pension Service," a BOK official said.

Foreign securities, including U.S. Treasuries, fell by $3.97 billion from a month earlier to $423.66 billion at end-March, accounting for 89.2 percent of the country's total foreign reserves. The value of foreign currency deposits lost $1.44 billion to $21.05 billion, while special drawing rights (SDRs) fell by $200 million to $15.57 billion. Gold bullion holdings remained unchanged at $4.79 billion. The country's reserve position with the International Monetary Fund (IMF) decreased by $60 million from a month earlier to $4.55 billion at the end of March, the data showed.

South Korea ranked as the world's 12th-largest holder of foreign reserves as of end-February, down from tenth place a month earlier. China topped the list, followed by Japan, Switzerland, Russia, and India, according to the BOK. "Though South Korea's foreign exchange reserves increased by $1.7 billion in February, some peer countries mark their gold holdings to market for comparison, and recent gains in gold prices have contributed to their higher rankings," the BOK official said.