Last Year, Foreign Exchange Banks Traded an Average of 52.84 Billion USD Daily... 5.3% Decrease

[Asia Economy Reporter Kim Eun-byeol] Last year, the foreign exchange transaction volume of domestic foreign exchange banks decreased compared to the previous year. This was due to the sharp rise in the exchange rate in the first quarter of last year, followed by a downward stabilization, which reduced the demand for foreign exchange derivative transactions.

According to the Bank of Korea's '2020 Mid-Year Foreign Exchange Transaction Trends of Foreign Exchange Banks' released on the 28th, the average daily foreign exchange transaction volume of foreign exchange banks last year was $52.84 billion, down $2.93 billion (5.3%) from the previous year ($55.77 billion).

By product type, the spot foreign exchange transaction volume increased by $490 million (2.5%) from the previous year to $20.32 billion, while the foreign exchange derivative transaction volume decreased by $3.42 billion (9.5%) to $32.52 billion. A Bank of Korea official explained, "Despite the reduction in export and import volumes due to the spread of COVID-19, the spot foreign exchange transaction volume increased as domestic investors' overseas stock investments rose."

By bank, the transaction volumes of domestic banks and foreign bank branches were $24.77 billion and $28.07 billion respectively, decreasing by $1.31 billion and $1.62 billion compared to the previous year.

Among spot foreign exchange transactions, the KRW-USD transactions especially increased by $960 million (7.0%) to $14.72 billion compared to the previous year. The JPY-USD transactions ($530 million) decreased by $150 million (21.7%).

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