Global Forex Product Market Size Down 1.3% from 3 Years Ago... South Korea Up 6.7%

Korea's Foreign Exchange and OTC Derivatives Market Value Increases 89.9% Over 3 Years

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The global foreign exchange product market trading volume has decreased by 1.3% compared to three years ago. South Korea, however, saw a 6.7% increase during the same period.

According to the "Bank for International Settlements (BIS) Survey on Global Foreign Exchange and Over-the-Counter Derivatives Markets" released by the Bank of Korea on the 12th, the nominal amount of global foreign exchange and OTC derivatives transactions as of June this year totaled $632.2 trillion, down $8.1 trillion (1.3%) from June 2019 ($640.4 trillion).

By product, interest rate derivatives ($502.6 trillion) decreased by 4.1%, while foreign exchange derivatives ($109.6 trillion) increased by 11.2%. The Bank of Korea explained, "The decrease is due to a significant reduction in forward rate agreements using Libor as a benchmark rate following the recommendation to discontinue the use of Libor rates."

The market value of global foreign exchange and OTC derivatives transactions was $18.3 trillion, an increase of $6.3 trillion (52.1%) compared to June 2019 ($12.1 trillion). By product, foreign exchange derivatives ($4.7 trillion) and interest rate derivatives ($11.8 trillion) increased by 111.6% and 34.2%, respectively, compared to the previous survey.

South Korea's nominal amount of foreign exchange and OTC derivatives transactions totaled $1.8905 trillion, up $118.8 billion (6.7%) from June 2019 ($1.7717 trillion).

By product, the nominal amounts of foreign exchange derivatives ($1.0721 trillion) and interest rate derivatives ($815 billion) increased by 5.5% and 8.8%, respectively, compared to the previous survey.

Meanwhile, South Korea's nominal amount of foreign exchange and OTC derivatives accounts for about 0.30% of the global market, up 0.02 percentage points from the previous survey (0.28%).

Additionally, the market value of South Korea's foreign exchange and OTC derivatives transactions was $67.7 billion, an increase of $32.1 billion (89.9%) compared to June 2019 ($35.7 billion). By product, the market value of foreign exchange derivatives ($61.6 billion) increased by 136.1% compared to the previous survey, while interest rate derivatives ($6 billion) decreased by 36.3%.

The market value of South Korea's foreign exchange and OTC derivatives accounts for about 0.37% of the global market, up 0.07 percentage points from the previous survey (0.30%).