Q1 Daily Average Forex Trading Volume Hits $65.5 Billion 'Record High'... Increase Due to Exchange Rate Volatility Expansion

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] The average daily foreign exchange trading volume in the first quarter of this year reached an all-time high. This increase in foreign exchange trading was influenced by the Federal Reserve's (Fed) tightening measures and the aftermath of the Ukraine crisis.

According to the foreign exchange trading trends of foreign exchange banks announced by the Bank of Korea on the 26th, the average daily foreign exchange trading volume (spot exchange and foreign exchange derivatives trading) of foreign exchange banks in the first quarter was recorded at $65.55 billion.

This represents a 14.9% ($8.51 billion) increase compared to the previous quarter ($57.04 billion), marking the highest level since the statistics revision in 2008.

The Bank of Korea explained, "The increase in foreign exchange trading was due to expectations of the Fed's tightening measures, expanded exchange rate volatility caused by the Russia-Ukraine crisis, and growth in exports and imports."

By product, spot exchange trading ($24.96 billion) increased by $3.75 billion (17.7%), and foreign exchange derivatives trading ($40.59 billion) increased by $4.76 billion (13.3%) compared to the previous quarter.

By bank type, domestic banks' foreign exchange trading volume rose by $1.69 billion (6.5%) to $27.56 billion, while foreign bank branches' foreign exchange trading volume increased by $6.82 billion (21.9%) to $37.99 billion.