The position of the South Korean Foreign exchange reserves of the Central Bank indicates Intervention

Foreign currency reserves of South Korea recorded a decline for the 2nd month in a row in August, indicating the central bank may have to intervene to stem the depreciation of the Won.

Reported foreign exchange reserves fell $ 2.88 billion to $ 367.94 billion after posting its biggest drop in three years as much as $ 3.93 billion in July, according to the Korean central bank data published on Thursday. Won currency slumped to the weakest level since October 2011 last month following a devaluation of China's surprising move, which dims the outlook for exports and hit emerging market currencies in Asia. Military standoff between South Korea and North Korea also contributed to the weakening won.

Bank of Korea itself on 24 August, when Won touched its lowest level in nearly four years, said that measures to calm markets is essential. But so far the central bank still refused to give in response to speculation about intervention to support the exchange rate last month. While the minutes of the meeting on 13 August BOK policy released this week showed policy makers worried about the impact of China's economic slowdown and the devaluation of the yuan, which diniliai can bring significant pressure on the South Korean economy.