South Korea's foreign reserves shrank in March due to a decline in the dollar-converted value of its assets and unloading of dollars aimed at curbing the local currency's steep descent, central bank data showed Tuesday.

The country's foreign reserves stood at $457.81 billion as of end-March, down $3.96 billion from the previous month, according to the data provided by the Bank of Korea (BOK).

The BOK attributed the decline to a fall in the dollar-converted value of its asset holdings and "market stabilization measures," apparently referring to dollar selling to curb the won's excessive descent.

The won fell around 8 percent to the US dollar in March, market data showed.

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

The data showed that foreign securities were valued at $410.21 billion as of end-February, down $630 million from the previous month. The figure accounted for 89.6 percent of total foreign reserves.

The value of deposits also shrank $3.39 billion on-month to $22.81 billion at the end of March, which made up 5 percent of the reserves. Gold holdings remained unchanged at $4.8 billion, according to the data.

South Korea was the world's eighth-largest holder of foreign reserves as of end-February, the BOK said. (Yonhap)