Did Daily Forex Turnover in South Korea Reach a Record High in Q2 Due to Foreign Investment?
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Synopsis
In an unprecedented surge, South Korea's daily forex trading by banks has reached record levels in Q2. This remarkable growth is fueled by intensified foreign investment in domestic securities and exchange rate fluctuations, as detailed by the Bank of Korea. Discover the implications of this trend on the financial landscape.
Key Takeaways
- Record high daily forex turnover in Q2 of US$82.16 billion.
- 12.9% increase from Q1 driven by foreign investment.
- FX derivatives turnover rose to $49.39 billion.
- Spot FX trading volume surged 17.3% to $32.77 billion.
- Foreign investors net purchased $2.27 billion in local stocks in June.
Seoul, July 29 (NationPress) Daily foreign exchange (FX) trading conducted by banks in South Korea achieved a remarkable peak in the second quarter, driven by rising foreign investments in domestic securities and fluctuations in exchange rates, as revealed by central bank data on Tuesday.
The average daily FX turnover, which includes derivatives trading, hit US$82.16 billion during the April-June period, reflecting a 12.9 percent increase compared to the first quarter, according to the Bank of Korea (BOK).
This figure represents the highest quarterly amount since the central bank began collecting relevant data under the current statistical framework in 2008, as reported by Yonhap news agency.
"The surge is attributed to exchange rate volatility and heightened trading activity by foreign investors in domestic securities," stated a BOK official.
"Following the extension of foreign exchange market trading hours in July of last year, trading volume has consistently risen," he added.
The average turnover for FX derivatives rose by 10.2 percent from the previous quarter to $49.39 billion in the second quarter, while the average daily spot FX trading volume skyrocketed by 17.3 percent on-quarter to $32.77 billion, according to the data.
In June, foreign investors acquired the highest value of South Korean stocks in 15 months, as per the central bank's data released this month, spurred by reduced worries over U.S. trade policies and optimism regarding the new Seoul government's supportive market measures.
Offshore investors purchased a net US$2.27 billion worth of local stocks last month, marking the second consecutive month of net buying, according to the Bank of Korea (BOK).
This June figure is the highest since March 2024, when foreign investors net bought $3.84 billion worth of local stocks. Furthermore, foreign investors net purchased $2.81 billion in Korean bonds in June, extending their buying streak to five months.
Point of View
It is crucial to recognize the transformative impact of foreign investments on South Korea's financial markets. This unprecedented rise in forex trading underscores the trust international investors place in our economy, reflecting the effectiveness of governmental policies aimed at fostering a conducive investment environment. Our commitment to delivering accurate and trustworthy news remains unwavering.
NationPress
31/07/2025
Frequently Asked Questions
What was the average daily forex turnover in Q2?
The average daily forex turnover in the second quarter reached US$82.16 billion.
What factors contributed to the increase in forex trading?
The increase was driven by foreign investment in domestic securities and exchange rate volatility.
How much did foreign investors buy in June?
Foreign investors purchased a net US$2.27 billion worth of South Korean stocks in June.
What is the significance of this trading volume?
This trading volume is the highest recorded since the Bank of Korea began compiling relevant data in 2008.
What measures have been taken to boost forex trading?
The extension of foreign exchange market trading hours since July last year has contributed to the increase in trading volume.
