[Practical Finance] Should You Invest Extra Funds in Yen and Dollar... Currency Tech Platforms Also Gaining Attention

[Image source=Yonhap News]

#Office worker Lee Ji-yeon (31, pseudonym) started currency trading (exchange rate + investment) through an application (app) after her 20 million KRW savings, set aside as emergency funds, matured. She trades amounts ranging from 2 million to as much as 5 million KRW and earned a profit of 150,000 KRW last month.

With the continued yen depreciation and strong dollar, the number of currency traders is increasing. According to the "Foreign Currency Deposit Trends" announced by the Bank of Korea on the 22nd of last month, the balance of yen deposits stood at 5.53 billion USD as of the end of June, up 50 million USD (0.9%) from the previous month. Compared to the end of last year, 280 million USD flowed in over six months, an increase of 5.3%. Dollar deposits have somewhat decreased due to profit-taking amid the strong dollar. The balance of dollar deposits was 73.61 billion USD at the end of June, down 1.74 billion USD from the previous month.

Recently, interest in platforms useful for currency trading has also been rising, and commercial banks are launching services targeting these users.

The app "Dollar Rich," which has already gained popularity among currency traders, allows users to check real-time exchange rates and analyze factors such as the KRW-USD exchange rate, dollar index, and dollar gap ratio to assess the "suitability of dollar investment." It features a function that indicates whether buying dollars is advisable, which can be helpful for novice investors who lack a sense of whether purchasing dollars is appropriate.

SwitchOne, a currency trading platform launched by a startup, offers a service that provides a 100% preferential exchange rate, allowing users to exchange foreign currency for free. Previously, users could exchange up to 1,000 USD per day, but with a recent update, they can now freely exchange between 10 USD and 4,000 USD per day.

In the banking sector, services targeting currency traders have also been introduced. Hana Bank recently launched the foreign exchange trading service "Hana FX Market," which offers instant and scheduled foreign exchange transactions, currency exchange, and exchange rate alerts. A Hana Bank representative explained, "As the volatility of exchange rates has increased recently, this service aims to provide customers interested in currency trading with an easy experience and high preferential exchange rates." DGB Daegu Bank also launched the "Foreign Currency E-Wallet" service through its app, allowing users to conveniently store foreign currency, perform real-time exchange, and exchange at desired rates.

However, experts advise that using currency trading as the primary investment method is risky. It is recommended to use currency trading as a secondary option after securing other safe assets. Jung Sung-jin, Deputy Head of KB Kookmin Bank Gangnam Star PB Center, said, "The yen has high exchange rate volatility, and Japan's economy itself is facing difficulties. If your assets are 100, you should invest about 5 in this area; large-scale investment is risky."