SEOUL, April 3 (Xinhua) -- South Korea's foreign exchange reserves turned downward due to the lower conversion value of non-U.S.-dollar assets and foreign exchange market stabilization measures, central bank data showed Friday.
Foreign currency reserves declined 3.97 billion U.S. dollars from a month earlier to 423.66 billion dollars at the end of March, after growing 1.72 billion dollars in the previous month, according to the Bank of Korea (BOK).
The downturn came as the BOK allowed the National Pension Service (NPS) through the FX swap contract to borrow the dollar funds from the central bank's foreign reserves instead of buying them in the spot market.
The FX swap deal helped mitigate upward pressure on the South Korean won versus the U.S. dollar exchange rate by absorbing massive dollar demand from the NPS's overseas investment.
The strong dollar reduced the conversion value of non-dollar assets. The dollar index, which gauges the dollar value versus six major peers, gained 2.8 percent last month.
The country's foreign reserves were composed of 377.69 billion dollars of securities, 21.05 billion dollars of deposits, 15.57 billion dollars of special drawing rights, 4.79 billion dollars of gold bullion and 4.55 billion dollars of the IMF position.
The Asian country ranked as the world's 12th-largest holder of foreign reserves at the end of February, slipping two spots from a month earlier. ■