Foreign Exchange Trade
The foreign exchange trade by foreign exchange banks last year decreased to the lowest amount in four years.
The Bank of Korea (BOK) said on Feb. 23 that the annual amount of average foreign exchange trade for a day last year was US$44.4 billion, down US$1.58 billion from the previous year.
This is the lowest amount since 2010, when it reached US$41.89 billion. The amount of foreign exchange trade average per day in 2011 was US$46.83 billion, US$45.38 billion in 2012, and US$45.98 billion in 2013.
By product type, spot exchange transactions (US$16.65 billion) decreased 8.4 percent from a year ago, while the trade of foreign exchange products decreased 0.2 percent centered on foreign exchange swaps.
Ahn Tae-ryun, head of the central bank’s Capital Movement Analysis Team, explained, “Although the current transactions like exports increased, the spot exchange transactions among domestic banks decreased due to the increase in overseas operations, including private sector’s foreign securities investment.” He added, “The trade of foreign exchange products also decreased because of a reduction in exchange volatility.”
The daily fluctuation of won-dollar exchange rates decreased to 0.33 percent on average last year from 0.34 percent in 2013. The quarterly fluctuation rate, however, showed an upward trend starting from the second quarter of last year recording 0.24 percent, the lowest ever, then 0.29 percent in the third quarter and 0.44 percent in the fourth quarter.
By market, the market between banks (US$20.82 billion) decreased 8.2 percent and the trade between non-residents (US$14.65 billion) also decreased 1.7 percent, but the customer market (US$8.92 billion) increased 6.1 percent.
Domestic banks’ foreign exchange trades decreased 9.6 percent with US$20.34 billion, while those of foreign bank branches increased 2.5 percent (US$24.06 billion).
By currency type, the trade between won and foreign currencies decreased 2.2 percent with US$37.58 billion and the trade between foreign currencies decreased 9.8 percent with US$6.82 billion.