In 2025, the over-the-counter derivatives transaction volume of domestic financial companies hit an all-time high. Demand for foreign-currency hedges increased due to growth in external trade and exchange-rate volatility.
According to the "2025 financial companies' over-the-counter derivatives transaction status" released by the Financial Supervisory Service on the 4th, last year's over-the-counter derivatives transaction volume totaled 2 quintillion 6,779 trillion won. That was up 318 trillion won (1.2%) from a year earlier.
Derivative financial products are financial instruments whose prices are determined by changes in the value of underlying financial assets such as currency, bonds, and stocks. They are mainly used to manage price volatility risk and credit risk of financial products such as stocks, bonds, and currency.
Currency forward transactions accounted for the largest share at 1 quintillion 8,517 trillion won (69.1%). A currency forward transaction is a contract to buy or sell a specific currency at a predetermined price at a future point in time. Interest rate swaps came next at 5,986 trillion won (22.4%), followed by currency swaps at 1,191 trillion won (4.4%).
The Financial Supervisory Service (FSS) said, "With increased demand for foreign-currency hedges due to growth in the 2025 external trade volume and exchange-rate volatility, currency forward transactions increased," and added, "In contrast, interest rate swaps saw a decline in transaction volume as rate volatility narrowed with the continuation of the rate-cut stance."
By financial sector, banks accounted for the largest share at 2 quintillion 1,371 trillion won (79.8%), followed by securities at 3,853 trillion won (14.4%), trusts at 1,309 trillion won (4.9%), and insurance at 243 trillion won (0.9%). Compared with the end of the previous year, the transaction volume of securities and insurance decreased, while that of banks increased.
The outstanding transaction balance was 1 quintillion 4,632 trillion won, up 284 trillion won (2.0%) from the end of the previous year. The increase was driven by higher outstanding balances of interest rate swaps and currency forward transactions.