Bank of Korea hints then denies of dollar sell-off
February 23, 2005
News that the Bank of Korea might start to sell off its dollar reserves led to US dollar experiencing its biggest fall in 4 months, while traders worried at fears of a general sell-off of dollar reserves across Asia.
The world’s largest holders of US dollar reserves are Japan, China, Taiwan, and South Korea respectively, and with moves by OPEC nations to diversify especially into euros, a report for the South Korean parliament suggesting a move into Canadian and Australian dollars was interpreted as a move away from US dollar holdings.
South Korea was later keen to assure markets that it was not planning on selling its dollar reserves, leading to relieved speculators rallying to the dollar again.