South Korean currency’s volatility rises in 2013

The daily volatility of the South Korean currency rose in 2013 compared with a year earlier due to geopolitical risks and the Federal Reserve’s monetary stimulus tapering, the central bank said Tuesday.The average daily volatility of the local currency reached 5.2 won last year, compared with 4.2 won the previous year, according to the Bank of Korea (BOK). It recorded 3.4 won in the fourth quarter of last year, smaller than 5.3 won in the third quarter.The won showed the fourth-lowest volatility last year among 15 currencies of the Group of 20 economies, posting 0.34% in on-day currency volatility, the BOK said. South Korea has been differentiating itself from some emerging countries such as India and Indonesia, which are struggling to curb massive cross-border capital outflows and sharp currency depreciation, hit by speculation over the Fed’s tapering. South Africa’s daily currency volatility was the highest with 0.65% last year, followed by Brazil with 0.6% and Japan with 0.57%, the BOK said.The Korean won appreciated 1.4% against the US dollar in 2013 amid the surplus run of the current account. South Korean banks’ daily foreign exchange trading volume declined last year from the previous year, the BOK said, averaging $20.14 billion, down 6.7% from a year earlier.