Unprecedented Growth in South Korea's Forex Transactions

Foreign exchange transactions in South Korea reached a historic high in the first quarter of this year, with an average of $72.76 billion per day. This marks the highest level since the statistical revisions in 2008, showing a significant increase from the previous quarter.

Key Drivers Behind the Surge

The surge in transactions is attributed to seasonal trends and a notable increase in foreign investment in domestic securities, especially bonds. Foreign bond funds experienced a net inflow of $7.1 billion, up from $3.59 billion in the last quarter of the previous year.

Impact of Exchange Rates and Derivatives

The rising won-dollar exchange rate has also played a crucial role, increasing demand for foreign exchange risk hedging. Foreign exchange derivatives transactions, the market's largest segment, grew by 6.5% to $44.81 billion, while spot transactions increased by 9% to $27.94 billion.

Leading Players in the Market

Foreign bank branches were at the forefront, with their transaction volume increasing by 9.6% to $40.22 billion. Domestic banks also saw growth, with transactions rising by 4.8% to $32.54 billion.