Foreign currency deposits rise for first time in 4 months in S. Korea

Seoul, June 23 (IANS) Foreign currency deposits in South Korea increased for the first time in four months in May, driven by increased deposits at securities firms and the temporary placement of corporate overseas investment funds, central bank data showed on Monday.

Outstanding foreign currency-denominated deposits held by residents stood at US$101.36 billion as of end-May, up $5.1 billion from a month earlier, according to data from the Bank of Korea (BOK).

It marked the first on-month increase since January, reports Yonhap news agency.

Residents include South Korean citizens, foreigners who have resided in the country for more than six months and foreign companies. The data excludes interbank foreign currency deposits.

Corporate foreign currency deposits rose by $4.6 billion on-month to $87.01 billion, while individual holdings increased by $500 million to $14.35 billion.

By currency, dollar-denominated deposits climbed by $4.54 billion to $85.54 billion, driven by a rise in investor deposits at securities firms and the temporary placement of overseas investment funds by some companies, the BOK said.

Euro-denominated deposits remained nearly unchanged at $5.09 billion.

Japanese yen-denominated deposits increased $560 million to $8.43 billion, while Chinese yuan-denominated deposits fell $190 million to $980 million, mainly due to payments for current transactions, according to the central bank.

Meanwhile, South Korean companies' overall growth momentum weakened in the first quarter, though their profitability and financial stability saw slight improvements, central bank data showed on Monday.

Combined sales of 23,137 companies subject to an external audit rose 2.4 percent on-year in the January–March period, slowing from a 3.5 percent increase in the previous quarter, according to data from the Bank of Korea (BOK).

Companies in the manufacturing sector reported 2.8 percent sales growth in the first quarter, down from a 3.8 percent increase a year earlier, while sales growth in the non-manufacturing sector decelerated to 1.9 percent from 3.1 percent over the same period.

"The slowdown was attributable to weakening export growth centred on memory chips and intensified competition from low-cost Chinese products," a BOK official said.

"In the non-manufacturing sector, falling maritime freight rates and a decline in domestic housing construction led to slower sales growth in the transportation and construction industries," he added.

—IANS

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