South Korea's daily average foreign exchange transactions in the first three months of 2021 rose to their highest since records began in 2008.
Data from the Bank of Korea showed on Friday, that daily transactions of foreign currencies and derivatives reached an average of almost 61 billion U.S. dollars in the first quarter of this year.
This is 20.7 percent higher than the daily average in the fourth quarter of last year.
The central bank attributed the rise to the recovery in trade, foreign purchases of Korean bonds and increased investment in stocks.
"Imports and exports in the first quarter of this year rose compared to the fourth quarter of last year. An increase in foreign investors' holdings of Korean bonds, and local investors snapping up more overseas stocks including those from the U.S. also contributed to rise in transactions involving foreign currencies."
Transactions of foreign currencies in the first quarter climbed 21.8 percent on-quarter, and trading of foreign exchange derivatives expanded 19.9 percent.
One expert says foreign investors are flocking to the South Korean bond market for its high yields.
"Foreigners have been buying about 8 to 9 billion dollars of Korean bonds every month since February. The yield on 5-year government bonds in Korea is at around 1.5 percent, but other similar credit-rated countries have negative rates or rates near zero."
Local investors' overseas stock transactions were also valued at some 128 billion dollars in the first quarter of this year, marking the largest quarterly amount since the Korea Securities Depository began records in 2011.
Kim Jae-hee, Arirang News.