South Korea's foreign currency retail deposits reduced last month as importers withdrew funds from their foreign currency accounts for import payment, central bank data showed Tuesday.

Foreign currency retail deposits held by banks and local branches of foreign banks reached 36.03 billion U.S. dollars as of the end of December, down 2.35 billion dollars from a month earlier, according to the Bank of Korea (BOK).

The reduction came as importers increased withdrawal from their foreign currency accounts to pay the import bills at the end of the year.

For local lenders, retail deposits denominated in foreign currency amounted to 33.87 billion dollars, or 94 percent of the total, as of end-December. The figure was down 2.45 billion dollars from the previous month.

Foreign currency deposits held by local branches of foreign banks increased 100 million dollars on-month to 2.16 billion dollars at the end of December.

By depositor, corporate deposits denominated in foreign currency fell 2.34 billion dollars to 32.04 billion dollars over the cited period, but individual deposits were almost unchanged at 3.99 billion dollars as of end-December.

Corporate deposits are usually regarded as an unstable source of retail funding for banks. Local exporters deposit foreign cash holdings earned through trade into the foreign currency accounts for short-term settlement purposes, leading to high volatilities.

By currency, retail deposits denominated in the U.S. dollar ranked first in terms of deposit size with 29.68 billion dollars deposited as of end-December. It was followed by the European single currency with 3.4 billion dollars deposited, the Japanese yen with 1.95 billion dollars and other currencies, including the British pound, the Australian dollar and the Chinese yuan, with 1 billion dollars.