South Korea's foreign reserves contracted to 306.4 billion U.S. dollars last month due to a reduction in conversion value of non-dollar denominated assets, the central bank said Tuesday.

Foreign reserves reached 306.4 billion dollars as of the end of December, down 2.23 billion dollars from a month earlier, according to the Bank of Korea (BOK).

The December decline was mainly attributable to a fall in conversion value of non-dollar assets denominated in the Europe's shared currency and the British pound that depreciated against the dollar last month.

The nation's foreign reserves consisted of 277.94 billion dollars of securities, 20.29 billion dollars of deposits, 3.45 billion dollars of special drawing right (SDR), 2.55 billion dollars of International Monetary Fund (IMF) positions and 2.17 billion dollars of gold bullion.

As of the end of November, South Korea was the world's seventh- largest holder of foreign reserves following China, Japan, Russia, China's Taiwan, Brazil and Switzerland.