Record-Breaking Forex Transactions in South Korea

In an unprecedented surge, the South Korean foreign exchange market witnessed record-high transactions in the second quarter, fueled by growing optimism over the appreciation of won-denominated assets.

Driving Forces Behind the Surge

The Bank of Korea reported a 12.9% increase in daily foreign exchange transactions, reaching $82.16 billion. This growth is attributed to extended trading hours, heightened won-dollar exchange rate volatility, and increased foreign investment in domestic securities.

Won's Strengthening Trend

The won-dollar exchange rate volatility saw a significant expansion, with the average rate dropping to 1,401 won from 1,453 won, indicating a strong won appreciation trend. Foreign investments in domestic securities also rose, averaging 238 trillion won monthly.

Spot and Derivatives Market Growth

Spot exchange transactions grew by 17.3%, while derivatives transactions jumped by 10.2%, showcasing a robust demand for forex derivatives amid market fluctuations.