South Korea witnessed a historic surge in daily foreign exchange (FX) turnover in 2023, achieving an average of $65.96 billion, according to data released by the Bank of Korea (BOK). This remarkable milestone, the highest since the revision of statistical standards in 2008, underscores the resilience of the country’s financial markets amid various economic challenges.
The surge in daily FX turnover was primarily fueled by increased securities trading by both local and foreign investors. Despite a dip in exports and imports during the same period, the demand for exchanges from stock investors, including residents, contributed significantly to the overall FX turnover. This positive trend reflects the adaptability and dynamism of South Korea’s financial landscape.
The country’s total trading volume in 2023 reached $1.275 trillion, marking a slight decline from the previous year’s $1.415 trillion. However, the robust performance of daily FX turnover signals strength and resilience, particularly in the face of global economic uncertainties.
Foreign investors played a pivotal role in this growth, with monthly trading of Korean stocks and bonds reaching 209 trillion won ($142 billion) in the first 11 months of the year. This represented a notable increase from the 183 trillion won recorded over the same period in the previous year, showcasing continued foreign interest in South Korea’s securities market.
Breaking down the data further, the daily average turnover on the spot FX market reached $25.81 billion in 2023, indicating an 11.6 per cent increase from the previous year. Additionally, FX derivatives saw an expansion of 2.3 per cent, reaching a figure of $40.15 billion. These figures highlight the diverse and active nature of South Korea’s FX market.