Seoul - Xinhua
South Korea\'s inter-bank foreign exchange (FX) trading volume hit the highest in more than three years in the third quarter due to continued growth in foreign trade-related transactions, the central bank said Tuesday. The daily average FX turnover for banks amounted to 22.16 billion U.S. dollars in the third quarter, up 3.2 percent from the previous quarter, the Bank of Korea (BOK) said in a statement. The figure was the largest since 23.37 billion dollars tallied in the first quarter of 2008. \"South Korea\'s foreign exchange trading volume has trended larger as overseas trade-related FX transactions continued to increase in line with expansions in exports and imports,\" an official at the BOK told Xinhua. The daily turnover of FX spots reached 9.68 billion dollars on average during the July-September period, up 4.6 percent from the previous quarter. The trading volume of FX swaps grew 2.6 percent on-quarter to 10.63 billion dollars in the third quarter, with that of FX forwards jumping 50 percent to 0.15 billion dollars over the same period. Local firms took 9.7 billion dollars of net short positions on the KRW/USD forwards in the third quarter as exporters brought forward such positions after the exchange rate soared to the year- high level amid concerns over Europe\'s debt crisis and the global economic downturn, according to the BOK. The KRW/USD rate surged to the year-high of 1,195 won on Sept. 26. During the July-September period, offshore traders built up hefty net long positions on the KRW/USD non-deliverable forwards (NDFs) worth 15.99 billion dollars, up 13.47 billion dollars from three months before. The sharp increase was mainly attributed to strong demand for safe assets caused by the European fiscal crisis and worries about the global economic slowdown.