SEOUL, June 13 (Xinhua) -- South Korea's foreign exchange trading grew last month due to strong demand for the Chinese currency and foreign currency derivatives, central bank data showed Friday.

The daily average transaction of foreign currencies and derivatives in the domestic inter-bank market stood at 39.41 billion U.S. dollars in May, up 1.39 billion dollars from a month earlier, according to the Bank of Korea (BOK).

The growth was affected by higher demand for the Chinese currency, of which the daily average trading expanded 0.37 billion dollars last month.

The daily average transaction of the U.S. currency reduced 0.22 billion dollars.

Demand for FX swaps added 0.31 billion dollars to 18.64 billion dollars in the cited month, while the transaction of other derivatives, including currency swaps and options, rose 0.13 billion dollars to 2.69 billion dollars.

Foreign capital worth 1.45 billion dollars flowed into the local stock market in May, while the domestic bond market posted a net foreign fund inflow of 7.83 billion dollars.

The daily average volatility in the won/dollar exchange rate decreased to 0.52 percent in May from 0.67 percent in the previous month.

The won/dollar exchange rate slipped to 1,380.1 won per dollar at the end of May from 1,421.0 won a month ago.

Premium on credit default swap, which gauges credit risk for five-year government bonds, averaged 31 basis points in May, down from 37 basis points a month earlier. ■