Global Foreign Exchange Market Size Up 14%... South Korea Maintains 'World 15th' Position

Employees organizing US dollars at the Counterfeit Response Center of Hana Bank Headquarters in Euljiro, Jung-gu, Seoul
[Image source=Yonhap News]

The global foreign exchange product market trading volume has increased by more than 14% compared to three years ago. South Korea saw a 22.5% increase during the same period, maintaining its position around 15th place worldwide.

According to the 'Bank for International Settlements (BIS) Survey of Global Foreign Exchange and Over-the-Counter Derivatives Markets' released by the Bank of Korea on the 1st, the average daily trading volume in the global foreign exchange market this year (as of April) was $7.5 trillion, up 14.1% from $6.6 trillion in April 2019.

BIS conducts a comprehensive and systematic survey every three years with central banks worldwide to collect information on the size and structure of global foreign exchange and OTC derivatives markets. South Korea has participated in the survey since 1998, and this is the 9th round.

The survey results showed that spot foreign exchange transactions increased by 6.5% to $2.1 trillion but their share in the total foreign exchange product market shrank from 30.1% to 28.1%. Foreign exchange swap transactions ($3.8 trillion) increased significantly by 19.1%, expanding their share to 50.7%. Forward foreign exchange ($1.2 trillion) and currency swap ($100 billion) transactions increased by 16.6% and 14.3%, respectively.

By domestic and foreign transactions, domestic transactions ($2.9 trillion) decreased by $40 billion (-1.5%), whereas foreign transactions ($4.6 trillion) increased by $1 trillion (26.4%).

By currency (total share 200%), the US dollar (88.5%) continued to have the highest intermediary transaction share. Additionally, foreign exchange transactions are concentrated in the top five countries (United Kingdom, United States, Singapore, Hong Kong, Japan), whose combined share reached 78.4%.

(Data provided by Bank of Korea)

As of April this year, South Korea's total foreign exchange product market trading volume averaged $67.74 billion per day, a 22.5% increase from $55.32 billion in April 2019.

South Korea's share in the global foreign exchange product market remained at 0.7%, the same level as the previous survey. Its ranking among surveyed countries also remained 15th. The share of Korean won-intermediated transactions in the total foreign exchange product market shrank slightly from 2.0% to 1.9%, but the ranking remained 12th.

The global OTC interest rate derivatives market trading volume averaged $5.2 trillion per day, down 18.8% compared to three years ago. Forward rate agreements ($500 billion) and interest rate options and other interest rate derivatives ($200 billion) decreased by $1.4 trillion (-73.9%) and $200 billion (-47.8%), respectively.

By currency, the US dollar and euro accounted for 77.1% of the market. The US dollar ($2.3 trillion) decreased by $1 trillion (-30.3%), while the euro ($1.8 trillion) increased by $200 billion (10.4%).

South Korea's OTC interest rate derivatives market trading volume averaged $10.82 billion per day, up 26.9%. Its share in the global OTC interest rate derivatives market increased from 0.1% to 0.2%, and its ranking among surveyed countries rose three places to 17th.

The share of Korean won-intermediated transactions in the total interest rate derivatives market expanded from 0.4% to 0.9% compared to the previous survey, and its ranking among surveyed countries rose from 11th to 8th.

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