South Korea's FX Reserves Hit a Four-Year High Despite a Stronger Dollar
South Korea's foreign exchange reserves rose to $443.16 billion at the end of October, the Bank of Korea said on Nov. 4. That is $2.6 billion more than at the end of September and the highest level since May 2022, a span of four years and five months. It also beat this year's previous high, set in August at $442.28 billion. What makes the increase notable is that October was a month when the US dollar got stronger, which normally pulls reserve totals down. This post explains what the reserves are, why they rose anyway, and what they are made of. What foreign exchange reserves are Foreign exchange reserves are the foreign-currency assets a central bank keeps on hand to stabilize the currency market and meet external payments. Think of them as a country's emergency savings in foreign money. If the Korean won suddenly weakens sharply, or if banks and companies struggle to get dollars, the authorities can sell some of these assets to supply dollars and calm the market. L...