In its annual report, the Bank of Korea (BOK) said its dollar holdings accounted for 60.5 per cent of its foreign currency assets at the end of 2011, down from 63.7 per cent a year ago.

The central bank's dollar holdings stood at 64.5 per cent and 63.1 per cent, respectively, in 2008 and 2009.

The BOK has been making efforts to diversify its foreign reserves by curtailing the weight of U.S. dollar-denominated assets, in line with changes in the global economic landscape and in a bid to better cope with market volatility.

The central bank said earlier it is considering expanding investment in other vehicles, like gold bullion.

Meanwhile, the central bank boosted the proportion of equity investments to 5.4 per cent last year from 3.8 per cent a year earlier. Its holdings of foreign government bonds also rose to 36.8 per cent from 35.8 per cent in 2010, the BOK said.

The amount of the central bank's gold bullion stood at US$2.16 billion at the end of last year, a big jump from $80 million a year ago, it said.

South Korea's foreign reserves reached a record $315.8 billion at the end of February.

(Yonhap)