South Korea’s foreign reserves declined for the third month in a row in June. According to data from the Bank of Korea (BOK), two key reasons for the drop. The BOK provided U.S. dollars to the national pension fund under their currency swap agreement. Moreover, the central bank made payments to redeem maturing foreign exchange stabilization bonds.
As of the end of June, South Korea’s foreign reserves stood at $412.21 billion, a decrease of $620 million from the previous month. The data showed that foreign securities, such as U.S. Treasuries, were valued at $363.98 billion at the end of June, down $6.44 billion from a month earlier. They accounted for 88.3 percent of the total foreign reserves. Meanwhile, the value of deposits increased by $5.94 billion over the same period, reaching $24.43 billion by the end of June.
According to the BOK, South Korea remained the world’s ninth-largest holder of foreign reserves as of the end of May.
Industrial output declines in May
Recent data showed that industrial output in South Korea fell 0.7 percent in May compared to the previous month.
According to data compiled by Statistics Korea, this decline comes as losses in the automobile sector offset gains in the semiconductor segment. Additionally, retail sales and facility investment also lost ground during the same period.
The industrial output, which measures the production in the mining, manufacturing, gas, and electricity industries, fell 1.2 percent in May. This was driven by losses in the automobile and machinery sectors, which counteracted the 1.8 percent increase in the chip industry.
South Korea’s industry ministry announced that it plans to pursue investment projects worth 2 trillion won (roughly $1.44 billion) over the next ten years. These projects will leverage smart and clean energy technologies in the shipbuilding industry, according to a report by Yonhap News Agency.
Smart and clean energy investments in shipbuilding
Earlier this week, South Korea’s industry ministry announced its plans to pursue investment projects worth 2 trillion won (roughly $1.44 billion) over the next ten years. These projects will leverage smart and clean energy technologies in the shipbuilding industry.
The Ministry of Trade, Industry, and Energy announced this initiative as part of its Vision 2040 – a strategic plan to develop advanced technologies for ships. This includes features such as full autonomous navigation capabilities and carbon-neutral propulsion systems. Moreover, the government aims to transform South Korea into a global leader in marine engineering by leveraging automated production processes, moving away from the traditionally labor-intensive industry structure.
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