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Bank of Korea data show FX reserves at $442.28 billion at end-August, up $14.33 billion from July's $427.95 billion, a sharp acceleration from monthly gains of just $0.37 billion in June and $0.59 billion in July, when new foreign exchange stabilization fund bond issuance did the work. The driver this time was a large increase in financial institutions' foreign currency deposits rather than fresh external borrowing, which rebuilds the authorities' intervention buffer and modestly reduces tail risk in USD/KRW and Korean credit spreads. Because deposit-driven gains can reverse month to month, the read only holds if September reserves stay above $440 billion; a renewed DXY advance that forces smoothing operations would be the counter-signal.
As a Macro signal, watch whether it changes price action, volatility, or flows around KRW=X.
Original Source: 연합인포맥스
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