The reserves totalled $295.96 billion at the end of last month, with an increase in deposits in foreign currencies  offsetting a drop in securities, a table in the Bank of Korea  statement showed.

It was the largest monthly gain since September 2010, when reserves expanded by $4.42 billion.

Most of the increase was attributed to the strengthening euro and British pound and thus a rise in their dollar-conversion value, it added, without providing further details.

The euro advanced about 2 percent against the dollar in January as a jump in inflation stoked expectations of interest rate rises.

Shin Jae-hyuck, a Bank of Korea economist, said the central   bank had sold some of its securities holdings in reshuffling its reserves portfolios, while raising the amount of deposits.

South Korea's foreign reserves ($ billion, at end-month):