Banks' foreign currency deposits hit record high in August

Foreign currency deposits at South Korean banks climbed to a record high in August as large companies logged higher export earnings, the central bank said Friday. Outstanding foreign currency-denominated deposits held by local residents reached US$41.02 billion as of end-August, up $4.45 billion from the previous month, according to the Bank of Korea (BOK). Residents include citizens, foreigners staying for more than six months and companies. The data excludes inter-bank foreign currency deposits. Companies' holdings of FX deposits rose $4.1 billion on-month to $36.56 billion, while such deposits held by individuals gained $350 million to $4.46 billion, it added. South Korea is differentiating itself from some troubled emerging countries as the surplus run of the current account and the accumulation of the foreign exchange reserves serve as a buffer against potential capital outflow. In June last year, the government unveiled plans to encourage local banks to secure more foreign currency deposits in a bid to protect against external shocks.