South Korea's average daily foreign exchange trading volume reached a record high during the second quarter of 2024 [1], [2].
This surge reflects significant shifts in investor behavior and market instability. The increase in trading activity highlights the sensitivity of the domestic market to global financial trends and the movement of foreign capital.
Bank of Korea officials said the average daily foreign exchange turnover for the period between April and June 2024 was 121.4 billion U.S. dollars [1], [2]. This figure represents an increase of about 18 percent over the first quarter [1].
According to the Bank of Korea, this is the highest quarterly level recorded since the central bank began collecting this specific data in 2008 [1]. The record-breaking volume indicates a period of intense activity within domestic banks.
Officials said the growth was driven primarily by two factors. Higher sales of stocks by foreign investors required more currency conversions, while increased exchange-rate volatility encouraged more frequent trading [1].
These dynamics suggest that the South Korean won has faced pressure as investors liquidated equity positions. The resulting volatility created a feedback loop, prompting further trading to hedge against currency fluctuations [1].
“Average daily foreign exchange turnover in Q2 2024 was 121.4 billion USD”
The record turnover suggests a period of instability for the South Korean won, as foreign investors exit stock positions. When combined with high volatility, this volume indicates that market participants are reacting aggressively to macroeconomic shifts, which can complicate the Bank of Korea's efforts to maintain currency stability.
