South Korea's Ministry of Finance announced on Friday that it will open its foreign exchange market to 24-hour trading starting in July in an effort to gain developed market status. Furthermore, South Korea will further remove restrictions on domestic transactions.
South Korean stocks have consistently failed to be upgraded from the MSCI Emerging Markets Index to the MSCI Developed Markets Index. The index compilers cite strict currency trading rules as a major reason hindering South Korea's inclusion in the developed markets index.
South Korean Vice Finance Minister Lee Hyoung-il stated that South Korea will formulate a roadmap for the internationalization of the Korean won in the first half of the year, with the goal of significantly improving the accessibility of the won and increasing demand, in order to advance the plan to include Korean assets in the MSCI Developed Countries Index.
Since Lee Jae-myung took office as South Korean president in June 2025, the South Korean government has introduced a series of market reforms and tax measures to boost the domestic stock market, and upgrading South Korea to a developed market is one of Lee Jae-myung's main policy commitments.
be proactive
South Korea has historically maintained strict policies in the foreign exchange market. Two years ago, the USD/KRW market was only open for six and a half hours a day, and direct USD trading could only be conducted through two South Korean interbank networks. Only in the last two years has South Korea extended foreign exchange trading hours and allowed foreign entities to trade KRW on overseas exchanges.
In addition to opening 24-hour foreign exchange trading, the South Korean Ministry of Finance plans to launch a new offshore won trading system. At the same time, it intends to relax reporting requirements, simplify the market participation registration process, and take other measures to increase trading demand, such as cross-border payment settlement and overseas financing.
This is also part of South Korea's broad financial reforms. Previously, the South Korean government had announced improvements to the short-selling regulatory system in the securities market, requiring more companies to publish their reports in English, and streamlining securities trading procedures, among other things.
South Korea's Ministry of Finance also forecasts that the economy will grow by 2.0% in 2026, following a 1.0% increase in 2025, up from the 1.8% forecast in August. This growth is mainly attributed to improved domestic demand and strong exports. The Ministry also projects South Korea's inflation rate to be 2.1% in 2026, unchanged from 2025.
Furthermore, South Korea's Ministry of Finance stated that, in order to enhance the competitiveness of South Korea's semiconductor industry, it will formulate a five-year policy plan in the fourth quarter of this year, supporting the industry through fiscal, tax, and regulatory measures. South Korea will continue its efforts to become one of the world's top three artificial intelligence powers and will also support key industries such as defense, biopharmaceuticals, petrochemicals, and steel.
