South Korea's foreign reserves fall on repayment of foreign debts

South Korea's foreign reserves reduced last month as the government repaid foreign debts that were borrowed to stabilize the local foreign exchange market, central bank data showed Wednesday. Foreign reserves were 326.44 billion U.S. dollars as of the end of June, down 1.66 billion dollars from the prior month, according to the Bank of Korea. The reduction came after the so-called foreign exchange stabilization bonds worth 1.02 billion dollars were repaid last month on maturity, the central bank said, noting that the bonds were issued 10 years earlier. Such bonds are floated to raise foreign liquidity that is used for stabilizing the foreign exchange market. The central bank is responsible for issuance and management of the bonds. A reduction in conversion value of non-dollar assets also contributed to the reserves decline. The European single currency depreciated 0.1 percent to the dollar last month, and the Australian dollar dropped 4.2 percent versus the greenback. As of the end of May, South Korea was the world's seventh- largest holder of foreign reserves following China, Japan, Russia, Switzerland, China's Taiwan and Brazil. The reserves in South Korea stayed above the 300-billion-dollar mark since April 2011 when it topped the level for the first time in the country's history. The reserves hit a record high of 328.91 billion dollars in January. The foreign reserves consisted of 295.57 billion dollars of securities, 20.03 billion dollars of deposits, 4.79 billion dollars of gold bullion, 3.41 billion dollars of special drawing rights and 2.63 billion dollars of International Monetary Fund positions.