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February 16th 2005

South Korea’s dollar reserves reach all-time high

South Korea’s dollar reserves have hit an all-time high of $200 Billion, eclipsing the previous record of $199 Billion, set last month.  South Korea attributed the increase in reserves to interest paid by the United States on outstanding Treasury securities. However, analysts wonder if the increase in South Korea’s reserves is actually an attempt by the Korean central bank to hold down its currency. The South Korean Won appreciated 15% against the USD last year, which could potentially harm its economy by eating into exports.   Reuters reports:

Analysts say South Korea has not abandoned a long-held policy of curbing the won in a bid to keep its exports competitive, especially since exports have been the main driver of economic growth over the past two years.

Read More: S.Korea FX reserves edge above $200 bln by mid-Feb

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Posted by Adam Kritzer | in Exotic Currencies | No Comments »

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