South Korean banks see record dollar deposits and gold investment

Capital flows within South Korea's major banking sector are shifting toward safe-haven assets due to stock market volatility and fluctuations in the KRW/USD exchange rate. As of August 20, dollar deposits at five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—reached a record $74.92 billion, a significant increase from July. This rise is attributed to individual investors taking advantage of lower exchange rates and export companies securing foreign currency.

Investment in gold has also surged. Gold bar sales at the five major banks reached 82.96 billion won between August 1 and 20, nearly triple the sales recorded in July. Additionally, gold banking balances increased to approximately 1.81 trillion won. Meanwhile, fixed deposit balances are approaching the 1,000 trillion won milestone, rising to 998.7 trillion won.

In contrast, interest in riskier or more liquid assets has declined. ETF sales at the five major banks saw a sharp drop compared to previous months, and the balance of negative interest accounts (overdrafts) decreased for the first time in four months, falling to 44.1 trillion won. This trend suggests a growing preference for liquidity and stability over aggressive returns amid economic uncertainty.