Seoul: South Korea's foreign reserves recorded a monthly decline in April, reaching their lowest level in five years due to the weak local currency, as revealed by central bank data on Thursday. The country's foreign reserves were reported at US$404.67 billion by the end of April, marking a decrease of $4.99 billion from the previous month.

According to Yonhap News Agency, this was the lowest level since April 2020, when foreign reserves were at $403.98 billion. The decline last month was primarily attributed to a currency swap agreement between the Bank of Korea (BOK) and the National Pension Service. This agreement aims to increase the swap limit to $65 billion from $50 billion and extend the deal by one year until the end of 2025, in an effort to support the weak won.

The central bank also noted that a decrease in foreign currency deposits at financial institutions contributed to the decline. South Korea's foreign reserves are composed of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights, and gold bullion.

Specifically, foreign securities, including U.S. Treasuries, were valued at $356.5 billion at the end of April, a decline of $5.03 billion from the previous month. These securities accounted for 88.1 percent of the foreign reserves. Additionally, the value of deposits decreased by $930 million to $23.23 billion during the same period.

At the end of March, South Korea ranked as the world's 10th-largest holder of foreign reserves. China led the list, followed by Japan, Switzerland, India, and Russia, according to the data.