South Korea's foreign-exchange reserves hit record high

South Korea's foreign-exchange reserves climbed to a fresh record high in August due to gains in investment profits, the central bank said Wednesday. The country's foreign reserves reached US$331.09 billion as of end-August, up $1.38 billion from the previous month, the Bank of Korea (BOK) said in a statement carried by South Korean news agency, Yonhap. The FX reserves rose for the second straight month in August after falling by the largest amount in 13 months in June. Foreign reserves consist of securities and deposits denominated in overseas currencies, along with International Monetary Fund reserve positions, special drawing rights and gold bullion. The BOK said that investment profits from managing the FX reserves gained ground, although a stronger U.S. dollar reduced the dollar-conversion value of non-dollar assets. The British pound appreciated 1.7 percent to the U.S. dollar while other non-dollar assets, including the euro and the yen, weakened against the greenback. Korea's growing FX reserves and the current account surplus serve as buffers for South Korea at a time when emerging countries such as India and Indonesia are suffering from foreign capital flight and currency depreciation, triggered by speculation over U.S. stimulus tapering. Despite monthly fluctuations, the FX reserves have been on the rise, aided by the continued trade surplus and foreign capital inflows. The BOK said earlier that foreigners were net buyers of local stocks and bonds for the most part of August. As of the end of July, South Korea was the world's seventh-largest holder of foreign-exchange reserves.