Q2 Average FX Transactions by Banks Exceed $120 Billion, Marking Highest Level Since Statistical Revision

Trends in Foreign Exchange Transactions by Foreign Exchange Banks in Q2 2026, Announced by the Bank of Korea

Record-High Transaction Volume Reached in Just One Quarter Since Statistical Revision

Increase in Trading Volume of Foreign Investors' Domestic Securities Transactions

Rising Hedging Demand Due to Continued Volatility

The average daily foreign exchange transaction volume of foreign exchange banks in the second quarter of this year broke the previous all-time high in just one quarter since statistics have been compiled.

According to the "Trends in Foreign Exchange Transactions by Foreign Exchange Banks in the Second Quarter of 2026" released by the Bank of Korea on July 31, the average daily foreign exchange trading volume (spot FX and FX derivatives transactions) for foreign exchange banks in the second quarter of this year reached USD 121.44 billion, up 18.3% (USD 18.79 billion) from the previous quarter (USD 102.65 billion). This is the largest quarterly figure since statistics began being compiled in 2008. The previous record was set in the first quarter of this year, when the volume surpassed USD 100 billion for the first time.

An official from the Bank of Korea explained, "This is due to increased trading volumes in foreign investors’ domestic securities transactions and persistent hedging demand caused by continued exchange rate volatility."

Based on listed stocks and bonds, foreign investors' domestic securities transaction volume rose from KRW 475 trillion in the fourth quarter of last year to KRW 855 trillion in the first quarter of this year. For just April and May of the second quarter (which had not yet ended at the time of the statistics), the combined total already reached KRW 1,048 trillion. The KRW-USD exchange rate volatility rate also expanded from 0.37% in the fourth quarter of last year to 0.52% in the second quarter of this year, maintaining a high level.

By product, spot FX transaction volume was USD 54.11 billion, up 27% (USD 11.73 billion) from the previous quarter; FX derivatives transaction volume reached USD 67.32 billion, up 11.7% (USD 7.06 billion) from the previous quarter. By currency, KRW-USD transactions amounted to USD 43.74 billion, a 31.4% (USD 10.46 billion) increase. By type of bank, domestic banks’ transaction volume was USD 55.51 billion, up 20.1% (USD 9.3 billion), and branches of foreign banks posted USD 65.93 billion, up 16.8% (USD 9.48 billion) from the previous quarter.

By counterparty, interbank transactions between foreign exchange banks stood at USD 25.76 billion, up 23.6% (USD 4.92 billion); transactions with non-residents totaled USD 17.76 billion, up 41.1% (USD 5.18 billion); and transactions with domestic customers amounted to USD 10.59 billion, up 18.3% (USD 1.64 billion) from the previous quarter.

FX derivatives transaction volume reached USD 67.32 billion, up 11.7% (USD 7.06 billion) from the previous quarter. Forward FX transactions (USD 23.03 billion) rose 21.6% (USD 4.09 billion), mainly due to a USD 3.29 billion increase in non-deliverable forward (NDF) transactions. FX swap transactions (USD 42.03 billion) rose 7.5% (USD 2.92 billion) from the previous quarter.

Yonhap News Agency

This content was produced with the assistance of AI translation services.