BoK adds $3 billion to sovereign-wealth fund
SEOUL: The Bank of Korea said Tuesday it will entrust an additional $3 billion of the country's foreignexchange reserves to sovereign wealth fund Korea Investment Corp. for management.
"We'll sign a contract with KIC at the earliest possible time," the central bank said in a statement. "As before, the entrusted money will be classified as part of the country's foreign exchange reserves."
The $3 billion addition will bring the central bank's deposits with KIC to $20 billion.
The BoK, in a report to the National Assembly in October, said that of the $17 billion placed with the sovereign wealth fund, $8.1 billion was invested in treasuries and the remaining $8.9 billion was invested in stocks.
"Korea Investment Corp. has built a track record in investments in public markets over the past years and the size of our foreign exchange reserves has increased in the past year. So, we decided to pour more money into it," said an official at the BoK's international department.
KIC, which is charged with managing some of the country's foreign-exchange reserves and invests only in overseas markets using foreign currency, now manages more than $30 billion in assets.
South Korea's foreignexchange reserves stood at $290.23 billion at the end of November, down slightly from an all-time high of $293.35 billion in October. At the end of 2009, reserves totaled $269.99 billion.
The BoK attributed the increase to higher returns from its investments in foreign securities and a rise in the value of non-dollar assets when converted to dollars, but foreign exchange traders said the rise might have also been helped by steady dollar purchases by the central bank to slow the won's appreciation. -PB News