SEOUL, March 6 (Xinhua) -- South Korea's foreign reserves fell for the second straight month due to the expanded FX swap deal with the national pension fund, central bank data showed Thursday.

Foreign currency reserves shrank 1.8 billion U.S. dollars from a month earlier to 409.21 billion dollars at the end of February, after dwindling 4.59 billion dollars in the previous month, according to the Bank of Korea (BOK).

The consecutive reduction was attributed to the BOK's increased FX swap contract with the National Pension Service (NPS).

The NPS, manager of the country's public pension fund, borrowed dollar funds through the swap contract to invest abroad, not buying dollars in the foreign exchange market to mitigate volatility in the won/dollar exchange rate.

The won/dollar exchange rate has hovered above 1,400 won per dollar since December 2024.

The dollar index, which gauges the dollar value versus six major peers, retreated 0.5 percent in February, raising the conversion value of non-dollar assets.

The country's foreign reserves were composed of 357.38 billion dollars of securities, 28.01 billion dollars of deposits, 14.84 billion dollars of special drawing rights, 4.79 billion dollars of gold bullion and 4.19 billion dollars of the IMF position.

South Korea ranked as the world's ninth-largest holder of foreign reserves at the end of January, unchanged from a month earlier. Enditem

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