SEOUL, Jan. 25 (Xinhua) -- The South Korean currency's appreciation to the U.S. dollar hit the highest in 13 years in 2017 due to eased geopolitical risks on the Korean Peninsula, improved economic conditions and expectations for rate hike, central bank data showed Thursday.

The won/dollar exchange rate stood at 1,070.5 won per dollar as of end-2017, down 12.8 percent from 1,207.7 won a year earlier, according to the Bank of Korea (BOK). It was the won's highest ascent to the dollar since 2004.

Geopolitical risks on the peninsula eased after peaking from July to September because of the Democratic People's Republic of Korea (DPRK)'s sixth nuclear test and the test-launches of a long-range ballistic missile.

South Korea's economic growth rate topped 3 percent for the first time in three years in 2017. Expectations for the BOK's rate increase ran high as the central bank lifted its benchmark rate in November, the first rate hike in nearly six and a half years.

Volatility for the won/dollar exchange rate reduced amid the South Korean currency's appreciation to the greenback.

The won/dollar exchange rate volatility was 0.38 percent in 2017, down from 0.51 percent in the previous year.

The daily inter-bank foreign currency transactions averaged 22.85 billion U.S. dollars in 2017, slightly up 0.3 billion dollars from a year earlier.