The U.S. Treasury Department says South Korea’s economy continues its strong recovery from a sharp downturn in 2008.

In its “Report to Congress on International Economic and Exchange Rate Policies,” the department said Saturday that Korea’s economy grew six percent on an annualized basis in the first half of 2010 and three-and-a-half percent in the second half, bringing full year growth to six-point-one percent.

The report added that Korea’s real gross domestic product is now six-point-two percent above its pre-crisis peak. The department said exports were the main driver of Korea’s recovery in 2009, but investment and private consumption made greater contributions to growth last year, with domestic demand comprising over six percentage points.

Also according to the report, Korea’s foreign exchange reserves increased from 201 billion dollars in February 2009 to 287 billion dollars last December.

The department said South Korea officially maintains a market-determined exchange rate, adding that the Bank of Korea intervenes in the exchange market with the stated objective of smoothing over won volatility.

During the worst period of the global financial crisis, the report said Korea intervened heavily to support the won while in early 2009, Korea moved in the opposite direction, selling won and buying foreign currency to rebuild reserves and slow the won’s appreciation.