Seoul: South Korea’s foreign reserves experienced a monthly decline in April, reaching the lowest level in five years as reflected in the central bank data released on Thursday. The country’s foreign reserves stood at $404.67 billion at the end of April, marking a decrease of $4.99 billion from the previous month. This level is the lowest since April 2020 when reserves were recorded at $403.98 billion.

According to Qatar News Agency, the decline was primarily attributed to a currency swap agreement between the Bank of Korea (BOK) and the National Pension Service. The agreement involves increasing the swap limit to $65 billion from $50 billion and extending the deal by one year to the end of 2025 to support the weak won. The central bank also noted a decrease in foreign currency deposits at financial institutions as a contributing factor.

Foreign reserves are comprised of securities and deposits in overseas currencies, positions in the International Monetary Fund, special drawing rights, and gold bullion. Specifically, foreign securities, such as US Treasuries, were valued at $356.5 billion at the end of April, a reduction of $5.03 billion from the previous month, accounting for 88.1% of the total foreign reserves. The value of deposits also saw a decrease of $930 million, bringing the total to $23.23 billion during the same period.