Record High Daily Average Forex Trading of $66.8 Billion Amid Surge in Domestic and International Securities Investment

The Bank of Korea, Foreign Exchange Transactions Trends of Foreign Exchange Banks in Q1

In the first quarter of this year, the scale of daily foreign exchange transactions reached an all-time high due to a sharp increase in residents' overseas securities investments and foreigners' domestic securities investments.

According to the "Foreign Exchange Transactions Trends of Foreign Exchange Banks" announced by the Bank of Korea on the 2nd, the average daily foreign exchange transaction amount (spot exchange and foreign exchange derivatives transactions) of foreign exchange banks in the first quarter was $66.83 billion, an increase of $9.4 billion (16.4%) compared to the previous quarter.

This is the largest scale since the statistics were compiled in 2008.

The Bank of Korea explained, "Due to seasonal factors, transactions shrink during the year-end book closing in the fourth quarter, but tend to increase in the first quarter as transactions resume. In addition, there was a significant increase in residents' overseas securities investments and foreigners' domestic securities investments."

According to the Bank of Korea, the transaction volume in the first quarter compared to the fourth quarter of the previous year has increased by 11.7% over the past 10 years.

The settlement amount of foreign currency securities by domestic investors increased from $79.6 billion in the fourth quarter of last year to $97.5 billion in the first quarter of this year.

Also, during the same period, the monthly domestic securities purchase and sale amount by foreigners increased from $8.55 billion to $15 billion.

By product, the average daily spot exchange transactions increased by $5.58 billion (26.8%) from the previous quarter to $26.45 billion, and foreign exchange derivatives transactions ($40.39 billion) increased by $3.81 billion (10.4%) compared to the previous quarter.

By bank, the transaction scale of domestic banks increased by $4.3 billion (17.3%) from the previous quarter to $29.07 billion, and the transaction scale of foreign bank branches increased by $5.1 billion (15.6%) from the previous quarter to $37.77 billion.