South Korea plans to launch 24-hour foreign exchange trading in July. The move targets a long-sought upgrade to developed-market status from index provider MSCI.
The announcement from the Ministry of Economy and Finance marks a key reform to make the Korean won more accessible to global investors.
Officials said the change addresses barriers that have kept South Korea classified as an emerging market.
How 24-Hour Trading Addresses Market Gaps
South Korea’s FX market now operates from 9 a.m. to 2 a.m. local time.
This schedule leaves a gap during peak U.S. trading hours.
The new system will allow continuous trading, aligning the won with major currencies like the dollar and euro.
Authorities expect better price discovery and liquidity, especially in volatile periods.
Foreign investors will manage won positions in real time across time zones.
MSCI Upgrade Hinges on FX Accessibility
MSCI has held back on upgrading South Korea due to FX market limits, investor registration rules, and offshore trading issues.
In its 2025 review, MSCI noted the need for more effective FX reforms.
The 24-hour trading directly tackles accessibility concerns. It eases operations for global funds tracking MSCI indexes.
Additional Reforms for Foreign Access
The government will loosen rules for foreign financial institutions. Reporting requirements will drop, and electronic trading systems will improve.
A new offshore won settlement system starts by September. This lets investors handle won positions outside South Korea more easily.
These steps follow earlier changes, like extending hours to 2 a.m. in July 2024 to cover European markets. The latest reforms close the U.S. gap.
Potential Boost to Capital Flows
An MSCI upgrade could draw significant passive inflows to Korean stocks and bonds. Funds would rebalance to match the index shift.
“We expect the upgrade to help attract longer-term foreign capital and reduce volatility in equity prices and crossborder flows,” the Finance Ministry said in a statement.
The changes support broader goals to internationalize the won and build Seoul into a financial hub. Greater liquidity may cut hedging costs over time.
No major counterpoints emerged in reports. Some analysts note operational challenges in adapting to round-the-clock trading.
Timeline From Announcement to Launch
Officials will issue detailed guidelines before July. Infrastructure updates roll out in the first half of 2026.
The offshore system follows in September. MSCI’s next review could assess these changes for a potential upgrade.
The reforms come amid efforts to lift economic growth, with chip exports seen as a driver. South Korea aims for developed status to match its economic standing.
