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The Bank of Korea announced its foreign currency reserves on July 4. (Jeon Han)

By Lee Yoonseo and Kim Min-Jeung

Korea’s foreign exchange reserves have exceeded USD 400 billion for the first time.

According to the Bank of Korea (BOK), Korea’s foreign exchange reserves topped USD 400.3 billion, up USD 1.32 billion since May.

Foreign currency reserves play a crucial role in stabilizing exchange rates and raising the national credit rating, which represents national integrity and export competence.

Since the East Asian financial crisis of 1998, Korea has steadily increased its foreign currency reserves, which some politicians liken to a “nest egg,” as a form of foreign exchange risk management. The 75-month cumulative current account surplus and increase in foreign exchange asset management revenues were the two main contributing factors, said analysts.