Last Year’s Average Daily Foreign Exchange Trading Hits Another Record High

[Asia Economy Reporter Kim Eun-byeol] The average daily foreign exchange transaction volume hit a record high again last year. Although trade slowed, the increase in foreign investment in domestic securities led to more active derivative transactions, which had an impact.

According to the "2019 Foreign Exchange Transaction Trends of Foreign Exchange Banks" released by the Bank of Korea on the 31st, the average daily foreign exchange transactions (the sum of spot foreign exchange and foreign exchange derivatives transactions) of foreign exchange banks last year increased by $260 million (0.5%) from the previous year to $55.77 billion.

This surpassed the 2018 figure of $55.51 billion, the highest since statistics began in 2008.

Last year, spot foreign exchange transactions averaged about $19.83 billion per day. Due to a decrease in exports and imports, this was $1.51 billion (-7.1%) less than the previous year. By currency, won-dollar transactions amounted to $13.76 billion, down $1.59 billion (10.3%). Won-yuan transactions increased by $480 million (25.5%) to $2.36 billion.

Foreigners' increased domestic securities investment led to foreign exchange derivatives transactions rising to $35.94 billion, up $1.77 billion (5.2%) from the previous year. Foreigners use foreign exchange swap transactions to reduce risks from exchange rate fluctuations, so when domestic investment increases, the foreign exchange transaction volume also grows.

Looking at foreign exchange transactions by bank last year, transactions conducted by domestic banks averaged $26.08 billion per day, down $810 million (-3.0%).

This content was produced with the assistance of AI translation services.