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Seoul, Oktober 6, 2026 – South Korea’s foreign exchange reserves slipped in September to $440.56 billion, marking the first decline in four months and highlighting the pressures of strategic investment decisions and currency market volatility.
The Bank of Korea said reserves fell by $1.72 billion from August’s $442.28 billion.
The drop was driven by a $2.4 billion remittance to the Korea U.S. Strategic Investment Corporation, funding construction of a gas fired power plant in Texas.
This reflects Seoul’s growing inclination to actively deploy reserves into overseas projects rather than holding them passively in traditional assets.
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Currency movements compounded the decline.
The U.S. dollar strengthened by 1.7 percent in September, reducing the dollar converted value of assets denominated in euros, pounds, and Australian dollars. As a result, non dollar holdings lost value even though the underlying assets remained intact.
The September fall followed a dramatic surge in August, when reserves rose by $14.33 billion, the largest monthly increase in more than four years.
That expansion was fueled by valuation gains and higher returns on securities, underscoring the volatility of managing one of Asia’s largest reserve portfolios.
By category, securities holdings slipped to $386.03 billion, deposits fell to $29.95 billion, and IMF Special Drawing Rights declined to $15.48 billion.
Gold holdings remained steady at $4.79 billion, though officials have signaled plans to resume purchases for the first time in 13 years, a move aimed at diversifying assets amid currency fluctuations.
In a notable policy shift, the central bank announced it would no longer publish country rankings of foreign reserves, ending a practice maintained since 2000.
Analysts interpret this as an effort to reduce external scrutiny and focus on domestic priorities.
Despite the September decline, South Korea’s reserves remain substantial, serving as a critical buffer against external shocks.
Yet the shift toward active deployment whether in U.S. energy projects or renewed gold acquisitions suggests a recalibration of strategy.
For global markets, the move underscores Seoul’s dual role as both a stabilizer in currency markets and an investor in strategic assets abroad.
The trajectory of reserves will be closely watched in the months ahead, particularly as the dollar’s strength continues to reshape the value of non dollar holdings and as South Korea deepens its financial interdependence with the United States.
