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South Korea buys 20 tonnes of gold for $1.03 billion

South Korea bought 20 tonnes of gold with foreign reserves in February to increase its holdings, although total reserves fell for the first time in almost 12 months, reports Reuters.

The Bank of Korea increased its total holdings to 104.4 tonnes after spending $1.03 billion on its fifth buying spree in less than two years.

Total foreign reserves for the bank are now 1.5%, up from 1.1% in November.

The bank said the move was made for the long-term because gold is a safe asset for it that helps it respond effectively to tail risks from global financial situations as well as boosts its reliability of foreign reserve holdings.

It expects its ranking in the world for central banks to move from 36th to 34th.

Otherwise, the bank’s foreign reserves fell for the first time in February since the previous May as currencies such as the euro and the British pound declined against the dollar.

In February, its foreign reserves were at $327.4 billion, down $1.51 billion over the month before.

The country had the seventh largest foreign reserves in the world at the end of 2012, with 91% in securities.

Editor’s note: The headline has been corrected to read  $1.03 billion to match the text of the article.

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