South Korean banks are riding the wave of the country’s first-ever trade volume of US$1 trillion.
Financing this record-breaking trade increased the banking system’s daily average foreign exchange turnover in the inter-bank market to US$21.3 billion in 2011, up 9.4% from a year earlier, according to the Bank of Korea (BOK). The figure is the largest since the bank began compiling the data.
“Current transactions such as exports and imports kept its upward trend last year in addition to continuing growth in capital transactions. These factors resulted in an all-time high of foreign exchange turnover,” said Kwon Gyeong-ho, a BOK economist. BOK is South Korea’s central bank.
Daily turnover of spots reached US 9.1 billion dollars in 2011, up 18.3% from 2010 due to the rising demand for foreign currency in the real economy. The trading volume of FX swaps stayed at a high level of US$10.5 billion last year, up 2.6% from a year earlier.
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