South Korea’s foreign exchange trading volume reduced in the second quarter of this year as the won-dollar exchange rate moved in a narrow range, central bank data showed Friday.
Daily average turnover in the foreign exchange market was 44.77 billion US dollars for the three months ended June 30, down 0.7 percent from the prior quarter, according to the Bank of Korea (BOK).
Spot transactions sank 10.9 percent as the won-dollar exchange rate showed a range-bound movement, lowering incentives to trade for speculative purpose. Daily volatility of the won-dollar exchange rate fell from 0.36 percent in the first quarter to 0.24 percent in the second quarter.
Trading of foreign exchange products, including swaps and forwards, increased 6 percent as financial institutions used Forex swap contracts to borrow the Chinese yuan funds offshore for depositing the funds with Seoul branches of Chinese banks. Yuan deposits in South Korea kept its record-breaking trend since late 2013.
By market, the Forex turnover in the inter-bank market retreated 1.2 percent, but the trading volume between banks and clients increased 3.9 percent.
By currency, trading between the South Korean currency and foreign currencies slid 1.1 percent, but those among foreign currencies, including the euro and the dollar, grew 3.9 percent.
Source:Xinhua