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FX trading by Korean banks hit all-time high last year, BOK says

Published: 21 Jan. 2025, 18:22

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,520.05 points on Jan. 21, down 3.50 points, or 0.14 percent, from the previous trading session. [YONHAP]

Daily foreign exchange (FX) trading by banks in Korea reached an all-time high in 2024 on increased demand for cross-border trading and transactions of currency-related derivatives amid heightened market volatility, central bank data showed Tuesday.

The daily FX turnover, including trading of derivatives, came to an average of $68.96 billion last year, up 4.6 percent from $65.96 billion a year earlier, according to data from the Bank of Korea (BOK).

It marked the largest figure since the central bank began compiling relevant data under the current statistic standards in 2008.

The growth was attributable to the rising currency exchange demand for exports and imports, as well as the growth in foreigners' domestic stock trading and local investors' investment in overseas securities, the BOK said.

Last year, Korea's exports advanced 8.2 percent from a year earlier to set a new annual record of $683.8 billion on the back of solid shipments of semiconductors.

The weak Korean won and the subsequent need for hedging also led to the surge in daily FX trading.

The Korean won sank to around 1,450 won against the U.S. dollar, the lowest in nearly 16 years, and has since stayed well below that level amid uncertainties at home and abroad.

The daily average turnover for FX derivatives went up 7.8 percent to $43.29 billion last year, while the figure on the spot FX market shed 0.5 percent to $25.67 billion, the data showed.

Yonhap