SEOUL, Jan 9 (Reuters) – South Korea said on Friday it will open up its currency market to allow 24-hour trading starting in July, further removing restrictions on onshore trading in a bid to win an upgrade to developed-market status, the finance ministry said.
After experiencing capital flight during the Asian Financial Crisis in the late 1990s, South Korea has maintained a restricted currency-trading regime, which Morgan Stanley Capital International (MSCI) has called an impediment in securing a long-anticipated upgrade to developed-market status.
“We will prepare in the first half a roadmap for the internationalisation of the won aimed at dramatically improving the won’s accessibility and increasing demand, such as offshore won financing,” Vice Finance Minister Lee Hyoung-il said.
“And, we will follow through on a roadmap for MSCI inclusion as announced,” Lee said in a news conference for the ministry’s biannual economic policy plan announcement.
Plans for 24-hour trading come two years after South Korea extended trading hours to allow foreign entities to trade the won from abroad as it vies for a place in a major global stock index.
Up until two years ago, the dollar-won market was only open for six-and-a-half hours a day, and direct dollar transactions could only be done through two domestic interbank networks.
The ministry also plans to introduce a new system for offshore won trading, loosen reporting requirements and make the registration process easier for market participation, along with other efforts to increase transaction demand, such as cross-border payment settlements and overseas financing.
An upgrade to developed market status is one of President Lee Jae Myung’s major policy pledges after he has rolled out market reforms and tax measures to boost the domestic stock market since he took office in June 2025.
Riding the policy drive, the KOSPI stock benchmark was the world’s best performer last year and rose 76% to mark its strongest performance since 1999.
The won was trading at its weakest levels since 2009 until late December, before it sharply rebounded on market-stabilising measures rolled out near year end to snap a four-year losing streak with a 2.3% gain.
Improving short-selling regulations, requiring more corporate filings to be released in English and making securities transactions easier were among other measures proposed in the stock-market upgrade roadmap released as part of the biannual announcement.
STRONGER GROWTH
The ministry forecast the trade-reliant economy will grow 2.0% in 2026, up from 1.8% seen in August, on improving domestic demand and robust exports, after expanding 1.0% in 2025. Inflation is projected at 2.1% in 2026, the same as in 2025.
Exports are expected to rise 4.2% this year, after growing 3.8% last year, on strong semiconductor demand for artificial intelligence investment, even as global trade slows on U.S. tariffs, according to the ministry.
To enhance the competitiveness of the semiconductor industry, the ministry said it would prepare a five-year policy plan in the fourth quarter, including financial and tax support as well as regulatory improvements.
The government will continue efforts to make South Korea one of the world’s top three AI powers to raise growth potential, the ministry said. It also vowed policy support for the defence, biopharmaceutical, petrochemical and steel industries.
Regarding a $350 billion investment package pledged as part of a U.S. trade deal last year, the ministry said it would be an opportunity to bolster the shipbuilding and nuclear energy sectors as well as seek new U.S. markets.
The government also plans to introduce tax incentives for domestic production in the second half amid worries about the manufacturing sector weakening due to increasing overseas investments.
(Reporting by Jihoon Lee, Cynthia KimEditing by Ed Davies)
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