South Korea's FX Trading Surges USD6.2B
Daily foreign currency and derivative transactions in the inter-bank market jumped by $6.21 billion month-over-month to reach $43.11 billion in January, according to figures released by the Bank of Korea (BOK).
The spike was driven primarily by intensified appetite for the greenback, with average daily U.S. dollar trading volumes swelling by $3.12 billion during the period. Chinese currency transactions also climbed, adding $0.61 billion to daily averages.
FX swap activity surged upward by $2.06 billion to hit $21.12 billion in daily average trading for January. Meanwhile, other derivative instruments—including currency swaps and options—posted gains of $0.26 billion, bringing the total to $2.82 billion.
Currency volatility increased as the South Korean won experienced heightened fluctuations against the dollar. Daily average volatility jumped to 0.45 percent in January, up from 0.36 percent recorded the prior month.
The won closed January at 1,439.5 per dollar, marginally weaker from 1,439.0 won at the end of December.
Credit risk indicators showed modest improvement, with the average premium on five-year government bond credit default swaps declining to 21 basis points in January from 22 basis points the previous month.
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