S. Korea`s inter-bank FX turnover dips for 2nd quarter

SEOUL, Oct. 23 (Yonhap) -- The daily foreign exchange turnover by banks in South Korea declined in the third quarter for the second straight quarter as currency volatility increased amid the global financial turmoil, the central bank said Thursday.

The daily trading volume of foreign exchange among banks averaged US$23.9 billion
in the July-September period, down 3.7 percent from three months earlier,
according to the Bank of Korea (BOK). The second quarter decline was the first
since the fourth quarter of 2005, it added.
The daily transactions of currency spots fell 9.2 percent to $8.15 billion in the
third quarter and those of dollar forwards shed 10.2 percent to $740 million, the
BOK said.
The daily fluctuation of the won-dollar exchange rate reached 13.1 won in the
third quarter, hitting a 10-year high, the BOK said. In September, average
volatility of the local currency reached a whopping 24.7 won.
The won underwent particularly high volatility in September as fears about
foreign capital flight from the local bond markets increased and a credit crunch
began to worsen in the wake of the collapse of U.S. investment bank Lehman
Brothers Holdings Inc.
The local currency fell 13.3 percent against the U.S. dollar as of the end of
September, compared with three months earlier. The Korean currency has declined
more than 30 percent to the greenback so far this year.
sooyeon@yna.co.kr
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