The Bank of Korea has removed the global foreign exchange reserves ranking\u2014which it had published every month for over 25 years\u2014from its statistical release starting with the end-August data. As controversy erupted over the format change made without prior explanation, the BOK pushed back, stating that “rankings are not an indicator of external soundness.”<\/p>\n
The BOK’s International Department issued its “Foreign Exchange Reserves at End-August” press release on the 3rd, omitting the table of major countries’ FX reserve rankings that had previously accompanied the data. This marks the first time in 25 years and 6 months\u2014since February 2001\u2014that the monthly release did not present South Korea’s global ranking as a separate item. Through the August 2025 release, the data had included major countries’ FX reserves alongside South Korea’s ranking.<\/p>\n
In a separate explanatory note released the same day, the BOK stated that simple rankings, which do not account for each country’s economic scale and external conditions, carry limited meaning as an indicator for assessing external soundness. The central bank noted that while South Korea’s ranking has fallen compared to the global financial crisis period, soundness indicators such as the ratio of short-term external debt to FX reserves have actually improved.<\/p>\n
The core function of FX reserves is to serve as a buffer absorbing external shocks such as foreign currency liquidity crunches. However, the BOK’s position is that simple rankings alone make it difficult to judge whether a country’s foreign exchange holdings are sufficient to cover short-term external debt repayments or respond to market instability. Even with large absolute amounts, a country’s shock-absorption capacity may be weak if short-term external debt or capital outflow risks are high; conversely, even with a lower ranking, the FX safety net may be adequate if the external debt structure is sound.<\/p>\n
The IMF also assessed in its July 2026 External Sector Report (ESR) that South Korea’s FX reserves are “adequate to respond to a broad range of possible external shocks.”<\/p>\n
The decision was also influenced by the fact that sharp swings in gold prices have caused frequent changes in FX reserve rankings. Each country’s FX reserves vary depending on its foreign exchange market intervention stance and asset composition, and significant movements in the market value of specific assets such as gold can alter valuation amounts and rankings even without meaningful changes in the country’s external conditions. The BOK determined that this year, gold price fluctuations and other factors have caused frequent ranking changes among countries, leading to numerous instances where temporary ranking rises or falls were interpreted as being linked to changes in South Korea’s external soundness.<\/p>\n
The crux of the controversy lies in “why remove it now.” There is suspicion that the BOK is attempting to preemptively block negative coverage in anticipation of a potential future decline in South Korea’s FX reserve ranking.<\/p>\n
The BOK rebutted this by pointing out that FX reserve rankings are not non-public information. It emphasized that since statistical users can download data from the IMF’s statistical database and individual central bank websites to calculate rankings themselves, the move was not intended to conceal information unfavorable to the foreign exchange authorities. In fact, as of end-July 2026, South Korea’s FX reserves ranked 10th globally, maintaining the same position as the previous month. The BOK stressed that the interpretation that the table was removed before a ranking decline materialized is inconsistent with the facts.<\/p>\n
However, observers note that excluding information that had been regularly provided for over 25 years without prior explanation is regrettable. Given that FX reserves have been accepted as a key indicator of South Korea’s external payment capacity since the Asian financial crisis, the central bank should have first explained the purpose and background of the change in how it presents the data.<\/p>\n
Going forward, country-by-country FX reserve data will mostly need to be confirmed through the IMF’s “International Reserves and Foreign Currency Liquidity (IRFCL)” statistics. For some countries not captured in IMF statistics or with delayed reporting, data will need to be obtained through the respective central banks’ websites.<\/p>\n
The removal of the rankings table has reduced the convenience of cross-country comparisons in the BOK’s press releases. Accordingly, there are likely to be growing calls for the central bank to go beyond simply eliminating the rankings and instead present substantive external soundness indicators such as the short-term external debt ratio and the shock-absorption capacity of FX reserves.<\/p>\n
Ultimately, the BOK’s decision sends a message that FX reserves should be evaluated not by “what global ranking does the country hold” but by “how long can it withstand an actual crisis.” However, given the delicate timing of removing the familiar rankings table, the foreign exchange authorities will likely need to present more multidimensional and consistent indicators that can replace the rankings in order to preempt unnecessary suspicion.<\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of Korea has removed the global foreign exchange reserves ranking\u2014which it had published every month for…\n","protected":false},"author":2,"featured_media":141988,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,846,64888,28614,72091,40281,72090],"class_list":["post-141987","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bok","tag-external-soundness","tag-foreign-exchange-reserves","tag-gold-price","tag-international-monetary-fund-imf","tag-short-term-external-debt-ratio"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/141987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=141987"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/141987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/141988"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=141987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=141987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=141987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}