Mysterious Drop: Bank of Korea FX Reserves Fall Despite Strong Won

Bank of Korea FX Reserves Decline: The Bank of Korea's foreign exchange reserves fell by $3.5 billion in March, despite the strengthening of the South Korean won against the US dollar, primarily due to changes in the value of foreign currency assets rather than direct intervention.

Implications for the Korean Economy: This decrease suggests that the Bank of Korea is managing its portfolio in response to global market movements, indicating a level of comfort with the won's appreciation, which can have mixed effects on inflation and export competitiveness.