Foreign currency deposits at banks continued to shrink in February due to a large cut in deposits held by local firms, central bank data showed Thursday.

Outstanding foreign currency deposits held by local residents came to $53.47 billion at the end of last month, down $2.13 billion from the previous month, according to the data from the Bank of Korea (BOK).

The February reading marks the lowest level since $51.1 billion tallied in March 2014, as well as the fourth consecutive month of on-month decline. From a year earlier, the February tally marks a 16.1 percent plunge.

Local residents include firms and foreign nationals who have stayed in the country for more than six months. The figure excludes inter-bank foreign currency deposits.

The on-month drop in February was largely attributed to a cut in foreign deposits held by businesses here, which dropped $1.83 billion from the previous month to $46.88 billion.

"The fall was largely due to a $1.65 billion drop in U.S. dollar-denominated savings by companies to cover their import-export bills," the central bank said in a press release.

The drop, however, also comes amid increased volatility in the dollar-won exchange rate.

The local currency continued to weaken against the greenback, making it less attractive to foreign investors.

On Feb. 19, the won-dollar exchange rate reached 1,239.05 won, the lowest level in nearly five years and eight months, forcing the central bank to verbally intervene for the first time since September 2011.

On Wednesday, the local currency closed at 1,216.2 won against the dollar, down 9.5 won from the previous day.

In February, foreign currency deposits held by individuals came to $6.59 billion, down $300 million from the previous month.

Despite a large cut in dollar-denominated savings, foreign deposits held in Chinese yuan slipped only $60 million from a month earlier to $4.34 billion as of the end of last month. Still, February marked the 10th consecutive month of decline in yuan-denominated savings, the BOK data showed. (Yonhap)