South Korea will push for the 24-hour operation of its foreign exchange market and the establishment of an offshore Korean won settlement system as part of efforts to improve foreign accessibility to its capital markets, the finance ministry said Friday.
The measures are being considered as part of a comprehensive road map designed to help the country get included in the developed market index by the global index provider Morgan Stanley Capital International, which will be unveiled later this year, according to the Ministry of Economy and Finance.
Currently, Korea’s FX market operates until 2 a.m., offering improved access to European investors but limited access to those in the United States.
The ministry said it is considering extending the operating hours to an all-day system and allowing offshore settlement in the Korean won for foreign investors to secure sufficient transactions for the FX market.
If realized, foreign financial institutions would be able to hold won accounts in Korea and directly manage won transactions.
Finance Minister Koo Yun-cheol explained South Korea’s efforts to reform its capital market, including such plans, while meeting with MSCI Chairman Henry Fernandez in New York on Thursday.
MSCI kept South Korea in its emerging market group earlier in the year, partly citing the limited convertibility of the Korean won in the offshore currency market as a key barrier to its reclassification to a developed market and its inclusion in the global index.
Koo was in New York to accompany President Lee Jae Myung, who attended the UN General Assembly earlier in the week. The president was set to return home later Friday. (Yonhap)
