South Korean banks' daily foreign exchange volume rose to the highest level in three years in the second quarter as banks handled more deals amid robust exports, the central bank said Sunday.
The daily foreign exchange trading volume among banks averaged US$21.48 billion in the April-June period, up 4.3 percent from the preceding quarter, according to the Bank of Korea (BOK). It marked the largest daily turnover since $21.81 billion tallied in the second quarter of 2008.
"The trading of FX spots has been on the rise mainly because exports continued to remain robust and the current account remained in the black," said an official at the BOK.
Daily transactions of foreign exchange spots gained 12.5 percent to $9.25 billion while FX swaps inched down 2.8 percent to $10.36 billion, it added.
Meanwhile, the volatility of the South Korean currency eased to the lowest level in more than three years in the second quarter, on the back of sound economic fundamentals.
The average daily volatility of the local currency reached 5.2 won in the second quarter, smaller than 5.9 won tallied in the first quarter, according to the central bank. The reading marked the lowest since 3.8 won in the fourth quarter of 2007.
The Korean currency has relatively high volatility as the country's foreign exchange markets have not grown enough to absorb external shocks and are exposed to excessive capital moving in and out of the country.
In the second quarter, the Korean won gained 2.7 percent to the dollar, compared with three months earlier.