International

Banks' foreign currency deposits suffer sharpest-ever drop in June

 Foreign currency deposits at South Korean lenders tumbled at the fastest clip ever in June as companies reduced their dollar holdings amid the stronger U.S. dollar trend, central bank data showed Monday.

Photo: Yonhap.

Photo: Yonhap.

Foreign currency deposits at local banks totaled US$67.62 billion at the end of June, down $7.17 billion from a month earlier, according to the data compiled by the Bank of Korea (BOK).

The on-month drop was the largest since June 2012 when the central bank began compiling such data.

Foreign deposits include those held by foreigners who have stayed in South Korea for more than six months, as well as by foreign companies operating here.

The BOK said the sharp decline in foreign currency deposits came as businesses shed their dollar-denominated savings and increase those of the local currency amid the stronger trend of the greenback against other major currencies.

The Korean won averaged 1,115.0 won against the U.S. dollar as of end-June, compared with an average 1,078 won recorded a month earlier.

Accordingly, deposits in U.S. dollars shrank by $5.89 billion to $56.65 billion in June, according to the data.

Euro-denominated deposits decreased $340 million to $3.62 billion over the cited period.

Overall, U.S. dollars accounted for 83.8 percent of all foreign currency deposits at local banks in June, followed by yen-denominated deposits at 4.9 percent and euro-denominated deposits at 3.4 percent.

By holders, companies held $53.35 billion in foreign currency deposits last month, down $6.46 billion from a month earlier, while deposits held by individuals fell $710 million to $14.27 billion last month, according to the data. By the Yonhap.

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