SEOUL: South Korea’s foreign exchange (FX) reserves dropped in August to the lowest level in nine months, central bank data showed on Tuesday (Sept 5), as authorities intervened in the currency market to curb the won’s weakness.

Foreign exchange reserves stood at US$418.3 billion (RM1.9 trillion) at the end of August, down US$3.5 billion from the month before, according to the Bank of Korea (BOK). It was the lowest level since November.

The BOK said the decline, the first in three months, was due to a fall in the converted value of non-dollar assets and measures to ease volatility of the FX market, an apparent reference to market intervention.

The measures included an FX swap with the pension fund, the BOK said in a statement. It was the first time the swap programme was explicitly mentioned in a monthly release since the central bank and the National Pension Service agreed to re-establish it in April.

The won weakened 3.57% against the dollar in August, its biggest drop in six months. During the month, it eased to a three-month low of 1,343.0 per dollar, or the joint-lowest since November.

The US dollar index, a measure of its value against six major currencies, rose 1.72% in August. – Reuters