BlockBeats report: On August 3, the Bank of Korea stated that it will collaborate with LS MnM, the Korea Exchange (KRX), and the Korea Securities Depository (KSD) to purchase domestically produced gold for the first time in 13 years through over-the-counter transactions, as escalating geopolitical risks underscore the need for South Korea to diversify its foreign exchange reserves.
LS MnM and Korea Zinc produce approximately 40 to 45 tons of gold annually as a byproduct of smelting, with about 10% used for export. The central bank stated that, if requested by relevant companies, it will consider using the trading and settlement system of the Korea Exchange (KRX) and the warehousing facilities being prepared by the Korea Securities Depository (KSD) to purchase a portion of the gold intended for export.
The central bank stated that bulk purchases will be arranged after prior consultations on price and quantity to limit the impact on domestic gold prices, and the new channel should reduce foreign exchange risk, as previous overseas purchases were made in U.S. dollars. Additionally, the central bank noted that it purchased a small amount of gold ETFs in the second quarter. As of July, its gold holdings remained unchanged at 104.4 tons, while South Korea’s foreign exchange reserves at the end of June stood at $427.36 billion, including $4.79 billion in gold reserves. (Jin10)