The foreign exchange reserves at the end of September, announced by the Bank of Korea (한국은행) on October 6, 2026, stood at $440.56 billion. That was $1.72 billion lower than at the end of the previous month. Reserves, which had risen for three consecutive months from June through August 2026, declined in September.

The decrease was affected by a decline in financial institutions’ foreign-currency deposits and the entrustment of assets to the Korea-U.S. Strategic Investment Corporation (한미전략투자공사) for strategic industry investment in the United States. The dollar value of assets denominated in euros, pounds sterling and Australian dollars also fell as those currencies weakened against the U.S. dollar. Therefore, the entire monthly decline cannot be treated as the amount actually remitted for investment in the United States.

Background and context

Foreign exchange reserves are foreign-currency assets held in forms such as foreign currencies and securities. Under International Monetary Fund (국제통화기금) standards, liquidity—the ability to use the assets immediately in a crisis—is important. Accordingly, assets tied up for a long period are excluded from foreign exchange reserve statistics.

The Korea-U.S. Strategic Investment Corporation is a public institution established in June 2026 to execute and manage strategic industry investments in the United States. The South Korean and U.S. governments announced on October 1 that they had finalized the first official U.S. investment project, and reports said the initial investment was planned to be remitted as early as late October. However, entrusting assets to the corporation is a matter that affects the calculation of foreign exchange reserves, while remitting the planned initial investment is a separate step.

The Bank of Korea did not disclose the amount of assets entrusted, the investment period or the contracted return. It also said that the amount and schedule for any additional entrustments had not been set. It is therefore difficult to calculate the amount actually being deployed for investment in the United States or the future flow of funds based solely on the disclosed decline in foreign exchange reserves.

Currency movements in September also affected the converted values. During the month, the euro depreciated 2.1% against the U.S. dollar, the pound sterling 2.3%, and the Australian dollar 2.4%, while the Japanese yen appreciated 1.8%. In statistics that report foreign-currency assets in dollars, the total can change when the dollar value of each currency shifts, even if the quantity of assets held remains unchanged.

What this news means

The point to note in these figures is not only the total amount of foreign exchange reserves, but also the nature of the reasons for the decline. Changes in financial institutions’ foreign-currency deposits and currency values affect the composition of assets or their dollar-converted value, while long-term entrusted assets may be excluded from foreign exchange reserves that are immediately available under IMF standards. Because these factors all contributed to the monthly change, it is difficult to conclude from the decline alone how much the reserves’ immediate availability has changed.

For example, readers who see news of a decline in foreign exchange reserves should not equate that figure directly with the amount remitted for U.S. investment or the amount actually spent. The reported plan for the initial remittance is for as early as late October, and the specific amount of entrusted assets has not been disclosed. The actual amount and timing of fund deployment need to be confirmed separately.

By asset type, securities accounted for the largest share, at $386.03 billion (87.6%). Deposits totaled $29.95 billion (6.8%), special drawing rights $15.48 billion (3.5%), gold $4.79 billion (1.1%), and the reserve position in the International Monetary Fund $4.30 billion (1.0%).

Compared with the end of the previous month, securities fell by $1.05 billion, deposits by $350 million, special drawing rights by $290 million, and the reserve position in the International Monetary Fund by $40 million. Gold holdings were unchanged at $4.79 billion. The overall decline thus reflects changes across several asset categories, and the decreases were not equal across categories.

In August 2026, the Bank of Korea said it would resume gold purchases by buying physical gold from domestic producers for export, but no additional purchases had been made by the time of the article. It is therefore a confirmed fact that gold holdings were unchanged at the end of September, but that cannot be interpreted as the result of carrying out the plan to resume gold purchases.

What is confirmed and what remains unknown

Confirmed facts

  • Foreign exchange reserves stood at $440.56 billion at the end of September, down $1.72 billion from the previous month.
  • The decline was attributed to a decrease in financial institutions’ foreign-currency deposits, assets entrusted to the Korea-U.S. Strategic Investment Corporation, and a lower dollar value for assets denominated in other currencies.
  • Securities accounted for 87.6% of the total, and gold holdings were unchanged from the end of the previous month at $4.79 billion.
  • The amount of entrusted assets, investment period and contracted return have not been disclosed, and no schedule for additional entrustments has been set.

What remains unknown

  • What are the specific amount, investment period and contracted return of the assets entrusted to the Korea-U.S. Strategic Investment Corporation?
  • How much is the initial U.S. investment, and when will the funds actually be remitted?
  • When will the amount and schedule for additional entrustments be finalized?

What readers should check

  • In the next foreign exchange reserves announcement, readers can look beyond the total and also check changes in individual asset categories, such as securities and deposits, along with the effects of currency conversion.
  • In announcements about investment in the United States, it is worth distinguishing the planned date of the initial remittance from whether the money has actually been sent, and checking whether the amount of entrusted assets is disclosed.
  • The policy of resuming gold purchases and actual purchases are separate facts, so it is advisable to check for additional purchases in subsequent announcements.

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