South Korea's foreign exchange reserves rose to a fresh record high in August as investment profits increased, the central bank said Friday.

   The country's foreign reserves reached US$312.19 billion as of the end of August, up $1.16 billion from the previous month, according to the Bank of Korea (BOK).

   Foreign reserves consist of securities and deposits denominated in overseas currencies, along with International Monetary Fund (IMF) reserve positions, special drawing rights and gold bullion.

   "Last month, the FX reserves gained mainly because of rising investment profits. Gains from the conversion value of non-dollar assets were not large," Shin Jae-hyuk, an economist at the BOK, told reporters.

   The FX reserves surpassed the $300 billion mark for the first time in April amid sustained inflows of foreign capital and robust exports.

   In July, the BOK bought gold for the first time in 13 years in an effort to diversify the portfolios of the foreign reserves.

   In August, the euro inched down 0.1 percent to the greenback and the pound fell 1 percent against the dollar. But the yen edged up 0.4 percent against the dollar as a global economic slowdown and the eurozone debt fears raised demand for safe assets.

   As of the end of July, South Korea was the world's seventh-largest holder of foreign exchange reserves after China, Japan, Russia, Taiwan, Brazil and India.

Source: Yonhap News (Sept. 2, 2011)