S. Korea celebrates success of won-yuan direct trading market

SEOUL - South Korea on Tuesday celebrated the success of the won-yuan direct trading market that has quadrupled the trading volume after the opening here a year ago.

The Korea Center for International Finance held a conference in central Seoul to celebrate the first anniversary, attended by officials of the finance ministry and the central bank as well as experts and bankers.

According to data of the Bank of Korea, the country's central bank, the daily trade volume between the Chinese and South Korean currencies here averaged an equivalent of $3.63 billion in November, up from $0.88 billion a year earlier.

In the past year, the daily average of the won-yuan transactions was $2.26 billion, accounting for more than a quarter of the won-dollar trading.

The rapid growth in the direct exchange between the won and the yuan was attributed to lower transaction costs.

To exchange the won for the yuan, before the direct market opened, the won should had been swapped into the dollar that would be changed into the yuan later. Such brokering with the dollar raised transaction costs.

Helped by lower transaction costs, South Korean companies have increased the usage of the Chinese currency for trade settlement.

Trade settlement with the yuan among local companies rose to $930 million in September from $240 million a year earlier. It was an almost four-fold growth.