Q1 Average Daily FX Transactions at Banks Exceed $100 Billion...Highest Since Statistical Revision

Average Daily Volume Hits $102.65 Billion, Surpassing Previous Quarter’s $84.62 Billion
Seasonal Factors and Rise in Foreign Investors’ Domestic Securities Trading Drive Growth
Increased Demand for FX Risk Hedging Amid Heightened Market Volatili

The average daily foreign exchange trading volume of foreign exchange banks in the first quarter of this year reached its highest level since the statistics revision. This was due to seasonal factors, an increase in the trading volume of foreign investors in domestic securities, and growing demand for foreign exchange risk hedging as volatility rose.

An employee is organizing US dollar bills at the Counterfeit Response Center of Hana Bank in Jung-gu, Seoul. Photo by Yonhap News.

According to the "Trends in Foreign Exchange Transactions of Foreign Exchange Banks in the First Quarter of 2026" released by the Bank of Korea on the 29th, the average daily foreign exchange trading volume (including spot and derivative transactions) of foreign exchange banks in the first quarter of this year was USD 102.65 billion, up USD 18.03 billion (21.3%) from USD 84.62 billion in the previous quarter. This is the highest quarterly figure since the statistics were revised in 2008.

An official from the Bank of Korea explained, "In addition to the usual seasonal factors, where trading typically increases again in the first quarter after declining due to year-end book closing in the fourth quarter, the increase in foreign investors' trading volume in domestic securities and the expansion in demand for foreign exchange risk hedging due to greater volatility also played a role." Based on listed stocks and bonds, the average monthly trading volume of foreign investors in domestic securities nearly doubled from 475 trillion won in the fourth quarter of last year to 855 trillion won in the first quarter of this year. The won-dollar exchange rate volatility also increased from 0.37% in the fourth quarter of last year to 0.60% in the first quarter of this year.

By product, spot transaction volume was USD 42.39 billion, up USD 8.8 billion (26.2%) from the previous quarter. By currency, won-dollar transactions totaled USD 33.28 billion, an increase of USD 7.33 billion (28.3%). By bank, domestic banks recorded USD 23.08 billion (up USD 3.42 billion, 17.4%), and foreign bank branches recorded USD 19.3 billion (up USD 5.38 billion, 38.6%). By counterparty, interbank transactions between foreign exchange banks amounted to USD 20.84 billion (up USD 4.36 billion, 26.4%), and transactions with non-residents reached USD 12.59 billion (up USD 4.26 billion, 51.3%). Transactions with domestic customers totaled USD 8.96 billion, increasing by USD 180 million (2.0%).

The volume of foreign exchange derivatives transactions was USD 60.27 billion, an increase of USD 9.23 billion (18.1%) from the previous quarter. Forward transactions totaled USD 18.94 billion, up USD 3.65 billion (23.9%) from the previous quarter, mainly driven by NDF transactions (USD 3.38 billion). Foreign exchange swap transactions amounted to USD 39.12 billion, an increase of USD 4.92 billion (14.4%) from the previous quarter.

By bank, domestic banks recorded a transaction volume of USD 46.2 billion, up USD 5.68 billion (14.0%) from the previous quarter, while foreign bank branches posted USD 56.45 billion, up USD 12.35 billion (28.0%) from the previous quarter.

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