BoK adds $3 bil­lion to sov­er­eign-wealth fund

The Pak Banker - - Company& -

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

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