Seoul: South Korea's foreign reserves experienced a decline for the first time in seven months in December, as reported by the central bank on Tuesday. This drop occurred amid heightened volatility in the foreign exchange market, prompting authorities to implement a series of market stabilization measures.

According to Yonhap News Agency, the country's foreign reserves totaled US$428.05 billion by the end of December, marking a decrease of $2.6 billion compared to the previous month. This decline was the first since June, following six consecutive months of increases, which culminated in the highest reserve level since August 2022 at the end of November.

A Bank of Korea (BOK) official noted that measures designed to curb volatility in the foreign exchange market contributed to the decrease in foreign reserves, though further details were not provided. The local currency had fallen below the significant 1,450 won level against the U.S. dollar in November, reaching its weakest point in approximately 16 years at around 1,480 won last month.

In response to these developments, authorities made pronounced verbal interventions and appeared to take steps to bolster the currency. On December 30, the final trading day of 2025, the won was quoted at 1,439.0 per dollar, reflecting a decrease of 9.2 won from the previous session.

Foreign securities, including U.S. Treasuries, declined by $8.22 billion from the prior month to $371.12 billion at the end of December, accounting for 86.7 percent of total foreign reserves. Conversely, the value of foreign currency deposits increased by $5.44 billion to $31.87 billion, while special drawing rights (SDRs) rose by $150 million to $15.89 billion. Gold bullion holdings remained stable at $4.79 billion.

Additionally, the country's International Monetary Fund (IMF) reserve positions saw an increase of $20 million from the previous month, reaching $4.37 billion at the end of December. South Korea maintained its position as the world's ninth-largest holder of foreign reserves at the end of November. China led the rankings, followed by Japan, Switzerland, Russia, and India, as per the data from the BOK.