The Bank of Korea (BOK) said Friday it has invested part of the country's foreign exchange reserves in a green bond fund for central banks in a bid to expand its investment in green projects.

The BOK said it took part in the Asian Green Fund that was launched by the Bank for International Settlements (BIS) on Thursday to invest in dollar-denominated green bonds issued in the Asian region. The BOK did not specify the amount of its investment.

Green bonds are meant to raise money to support environmental projects and other eco-friendly infrastructure investments.

The BIS fund is aimed at encouraging central banks to invest their FX reserves in green projects amid growing demand for environmentally friendly investments.

The BOK said its participation is designed to join global efforts to fight climate change and help develop the green bond market in Asia.

Foreign reserve assets linked to investments in environment, social and governance (ESG) initiatives reached $9.02 billion as of end-2021, up from $5.45 billion a year earlier, the BOK said.

South Korea's FX reserves came to $461.5 billion as of end-January, down $1.6 billion from the previous month. (Yonhap)