FX volumes hit three year high in South Korea

FX volumes continue to show strength as South Korean banks’ foreign exchange trading volume hit a near 3-year high in

FX volumes continue to show strength as South Korean banks’ foreign exchange trading volume hit a near 3-year high in the second quarter, the central bank announced.

The daily average foreign exchange turnover for banks amounted to $47.9 billion in the second quarter, up 3.5 percent from the previous quarter, the Bank of Korea (BOK) said in a statement. The second-quarter figure was the largest since 50.6 billion dollars in the third quarter of 2008.

The daily turnover of spots reached 20 billion dollars on average during the April-June period, up 8.7 percent from three months earlier. The rise in spots was attributed to foreign fund inflow into local bonds and stocks, according to the BOK.

The trading volume of foreign exchange products such as forwards, swaps and options remained unchanged at 27.9 billion dollars over the cited period. The increase in foreign exchange products was bolstered by rising short positions of domestic exporters in foreign exchange forwards and offshore traders’ long positions in non-deliverable forwards (NDF), the BOK said.

Local banks posted 22.6 billion dollars in the daily foreign exchange turnover during the second quarter, while the trading volume for foreign banks’ Seoul branches reaching 25.4 billion dollars.

South Korea has been slow to gain momentum in the retail FX market. Local investors are inclined to trade in the liquid KOSPI futures or WON futures on the domestic exchange.

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