Dollar and Yen Demand Rise as Euro Holdings Fall in Korea

Seoul, South Korea – February 28, 2026 – Individual demand for U.S. Dollar deposits has surged in South Korea, while yen holdings have also increased, according to data released by the Bank of Korea (BOK) on February 27, 2026. Conversely, euro-denominated deposits have declined. These shifts reflect recent currency movements and investor behavior, particularly as the won-dollar exchange rate stabilizes.

Resident Foreign Currency Deposits Decline

Total resident foreign currency deposits in foreign exchange banks amounted to $118.03 billion in January, a decrease of $1.4 billion from the previous month’s $119.43 billion. This marks the first decline in three months, since October of last year.

Dollar Deposits Increase Driven by Individual Demand

U.S. Dollar deposits reached $96.34 billion, a $410 million increase from the previous month. This growth was primarily fueled by a $390 million rise in individual dollar deposits, reaching $14.4 billion. Corporate dollar deposits saw a more modest increase of $10 million, totaling $81.93 billion. The increase in individual dollar purchases coincides with a period of relative calm in the exchange rate, which recently fell from above 1,480 won to the 1,420 won range.

Yen Deposits Rise Amid Corporate and Securities Activity

Yen deposits increased by $520 million to $9.51 billion, driven by increased current payments received by companies and yen demand from securities firms.

Euro Deposits Decrease Due to Corporate Payments

Euro-denominated deposits decreased by $2.36 billion, falling from $11.75 billion to $9.39 billion. This decline is attributed to companies settling current account payments to clients that were entrusted to them in December of last year.

Bank-Specific Trends

Domestic banks experienced a $2.72 billion decrease, bringing their total to $98.88 billion, while foreign bank domestic branches saw a $1.32 billion increase, reaching $19.15 billion.

Exchange Rate Dynamics and Deposit Trends

According to Shin Sang-ho, head of the Bank of Korea’s capital movement analysis team, there is a historical inverse relationship between exchange rates and resident foreign currency deposits. Investors tend to purchase assets when exchange rates fall and sell them when rates rise.

Current Exchange Rates

As of February 5, 2026, exchange rates were as follows:

• INR: 1.0000
• USD: 90.4400 (Buy), 91.3444 (Sell)
• EUR: 106.8100 (Buy), 107.8781 (Sell)
• JPY: 57.8600 (Buy), 58.4386 (Sell)
• GBP: 123.9400 (Buy), 125.1794 (Sell)

Hana Bank’s dealing room in Seoul displayed the won-dollar exchange rate at 1,424.10 won on February 26, 2026, a decrease of 5.30 won (0.37%) from the previous trading day.