SEOUL, Sept 5 (Reuters) - South Korea’s dollar deposits rose in August because of an increase in trade-related funds, after slipping in July, central bank data showed on Friday, and yuan deposits also went up as investors continued to show interest in higher yields.
Dollar deposits rose $3.8 billion last month to stand at a total of $42.1 billion, while yuan deposits increased $1.8 billion to $20.0 billion, the Bank of Korea data showed.
The central bank said the rise in dollar deposits was due to an increase in the amount of money deposited by exporters and importers in August.
“Dollar deposits rise when importers buy dollars in advance for future purchases or when exporters deposit their profits and ... they can’t do it when they don’t have the money,” said an official at the central bank, who declined to be named.
“There are some seasonal factors that affect deposits, but they mostly follow (trade) trends.”
In August, average exports per working day rose 3.1 percent from a year earlier, the seventh straight month of annual gains, although exports fell overall on a yearly basis. Imports gained an annual 3.1 percent in August.
As of end-August, dollar-denominated deposits accounted for 61.4 percent of all foreign exchange accounts in South Korea, while yuan deposits accounted for 29.1 percent, the data showed.
South Korea’s total foreign exchange deposits rose in August to a record high of $68.6 billion, helped by the dollar and yuan increases. (Reporting by Christine Kim; Editing by Alan Raybould)