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UPDATE 1-S.Korea end-Apr FX reserves at record high amid intervention talk
May 3, 2011 / 12:47 AM / in 6 years

UPDATE 1-S.Korea end-Apr FX reserves at record high amid intervention talk

 (Adds background)	
 SEOUL, May 3 (Reuters) - South Korea's foreign exchange
reserves leapt by the most in nine months during April, central
bank data showed on Tuesday, with the sharp increase
underpinning market talk of dollar-buying intervention to curb
the won's gains. 	
 The reserves added $8.58 billion to $307.20 billion as of
end-April, their highest ever, versus $298.62 billion at the end
of March, the Bank of Korea said in a statement.	
 It was the biggest monthly gain since an $11.74 billion rise
in July 2010 and compared with a $0.95 billion rise in March.	
 A stronger euro and pound boosted the translated value of
dollar-denominated assets, together with investment income, it
added. Non-dollar assets represented 36 percent of the reserves
at the end of last year.	
 Local authorities have been spotted intervening in the forex
market to control the pace of the won's gains, only to be
outweighed by heavy dollar offers from exporters thanks to
booming overseas shipments.    	
 The won  gained 2.35 percent to the dollar
in April, bringing its year-to-date gain to 6 percent to
32-month highs as of the end of last month.	
 By comparison, the euro advanced 4.5 percent against the
U.S. dollar last month and the pound gained 4.2 percent,
according to the Bank of Korea.	
 South Korea's FX reserves, ranked seventh in the world at
the end of March, have logged sequential monthly growth since
last December.	
 The won is expected to strengthen further as the dollar has
been under pressure on expectations U.S. monetary policy will
stay loose. South Korean policymakers are also seen easing their
grip on the won to contain imported inflation.	
 South Korea's foreign reserves (in $ billion, at end-month):	
 April   March    Feb      Jan      Dec      Nov      Oct      	
 307.20  298.62   297.67   295.96   291.57   290.23   293.35	
	
 (Reporting by Kim Yeonhee and Lee Soo-jung; Editing by Jonathan
Hopfner)	
 

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