South Korea is set to significantly enhance its financial market accessibility with the introduction of 24-hour won-dollar trading starting from July. This landmark reform marks a pivotal step in Seoul’s efforts to modernize its foreign exchange market and attract greater global investment.
The nation’s Finance Ministry officially announced on Sunday the approval of crucial revisions to the code of conduct governing the onshore forex market. These changes, greenlit during a meeting held on Friday, are scheduled to come into effect on July 6, ushering in a new era for Korea’s currency market.
Under the newly revised regulations, the trading hours for the won-dollar pair, previously restricted from 9 a.m. to 2 a.m. the following day, will now operate continuously. During periods aligned with New York daylight saving time, trading will run from 6 a.m. Monday through 6 a.m. Saturday.
When daylight saving time is not observed, the continuous trading schedule will adjust to operate from 7 a.m. Monday to 7 a.m. Saturday. For the current year, New York’s daylight saving time spans from March 8 to November 1.
While the expanded trading window will accommodate transactions even on public holidays, it’s important to note that settlement processes will continue to adhere to bank business days, consistent with established market practices.
The traditionally limited trading hours have long been identified as a significant barrier preventing South Korea’s upgrade to developed market status by leading global index provider Morgan Stanley Capital International (MSCI). Korea has remained on the emerging market index, a classification that these reforms aim to address directly.
Authorities anticipate that these extended trading hours will dramatically improve market accessibility, offering enhanced convenience for both domestic and international investors, as well as exporters and importers. This move is also expected to contribute to lowering overall transaction costs and fostering greater liquidity within the market.
It’s important for market participants to note that trading hours for currencies other than the U.S. dollar will remain unchanged, operating from 9 a.m. to 3:30 p.m. daily.
Furthermore, the benchmark closing rate for the won-dollar market will continue to be established at 3:30 p.m., coinciding with the close of the standard daytime trading session.
Looking ahead, the financial authorities are also planning further revisions to the broader Foreign Exchange Transactions Regulations, with these updates slated for June.
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