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The finance ministry opened the new continuous trading platform at 6 a.m. local time on July 6, allowing spot dollar-won transactions to run without interruption until 6 a.m. on Saturday. Officials described the change as a landmark step that broadens currency convertibility while addressing longstanding barriers that have limited offshore use of the won. The system forms part of wider efforts to attract greater international capital flows into South Korean assets, according to a statement from the ministry.
Finance Minister Koo Yun-cheol said the initiative reflects South Korea’s confidence in its economic fundamentals, including its strong external position and rising foreign demand for local markets evidenced by inclusion in the World Government Bond Index. He added that the launch would serve as a starting point for a leap forward for the local currency. The minister’s comments came as banks prepared dealing rooms for extended hours, with some staff already working overnight shifts in the lead-up to the debut.
A Reuters assessment from January noted that authorities plan to relax rules for offshore transactions by September as well, building on years of incremental reforms aimed at winning an upgrade from MSCI. The index provider kept South Korea in its emerging-market category in a June review, citing persistent accessibility issues in the onshore foreign exchange market that constrain operational flexibility for global investors. MSCI acknowledged ongoing policy changes but stressed that market participants would need time to evaluate their sustained impact.
Bloomberg figures show major lenders such as Hana Bank have expanded trading desks in both Seoul and London to manage the new schedule, which extends well beyond the previous 6.5-hour window that operated mainly during domestic business hours. The shift addresses gaps that previously forced many overseas investors to route trades through limited channels, often incurring extra costs. South Korean dealers have expressed concerns about heightened operational risks from around-the-clock coverage, yet the finance ministry maintains the reform will ultimately deepen liquidity.
The move marks a significant loosening of controls on the won, a policy long shaped by memories of the 1997 Asian financial crisis that triggered capital flight and forced emergency interventions, according to multiple Bloomberg reports on the preparations. In the first hours of trading the won held largely steady, easing just 0.1 percent to trade near 1,531 against the dollar, South China Morning Post data indicated. Authorities continue to monitor flows closely from a dedicated oversight room to guard against excessive volatility.
The Bank of Korea will host a 24-hour foreign exchange computer network under the updated framework, which required regulatory adjustments but no parliamentary approval, a ministry official told Reuters in September. This infrastructure is expected to facilitate smoother transactions for global participants seeking exposure to South Korean equities and bonds. The government has indicated further measures to improve market openness could follow based on early performance of the new system.
