South Korean Reserves Soar to Record $442 Billion

South Korea's foreign exchange reserves surged to a record $442.28 billion in August, up from $427.95 billion a month earlier, according to the Bank of Korea.

The central bank attributed the sharp increase to a surge in foreign-currency deposits held by financial institutions, returns generated from foreign assets, and an increase in the dollar value of assets denominated in currencies including the euro and British pound.

The policy introduced earlier this year that pays interest on excess reserves deposited at the Bank of Korea is believed to have contributed to the increase in deposits.

Most major currencies strengthened against the U.S. dollar during August, with the euro appreciating 0.5% and the British pound also rising 0.5%.