Seoul: Daily foreign exchange (FX) trading by banks in South Korea reached an all-time high in 2024 on increased demand from cross-border trading and transactions of currency-related derivatives amid heightened market volatility, central bank data showed Tuesday.
According to Yonhap News Agency, the daily FX turnover, including trading of derivatives, came to an average of US$68.96 billion last year, up 4.6 percent from $65.96 billion a year earlier. This marks the largest figure since the central bank began compiling relevant data under the current statistic standards in 2008.
The growth in FX turnover was driven by rising currency exchange demand for exports and imports, alongside growth in foreigners' domestic stock trading and local investors' investments in overseas securities, as noted by the Bank of Korea (BOK). South Korea's exports saw an 8.2 percent increase from the previous year, setting a new annual record of $683.8 billion, largely due to robust semiconductor shipments.
Additionally, the depreciation of the Korean won and subsequent hedging needs contributed to the surge in daily FX trading. The won fell to approximately 1,450 against the U.S. dollar, marking its lowest value in nearly 16 years, and has remained below that level amid ongoing uncertainties.
The daily average turnover for FX derivatives rose by 7.8 percent to $43.29 billion last year, while the spot FX market experienced a slight decline of 0.5 percent, reaching $25.67 billion, as per the data provided.