South Korea's Bold Move to Boost Currency Market
Starting in July, South Korea will allow 24-hour trading in its currency market. This move is part of a broader strategy to make the Korean won more accessible worldwide, attracting more investors and increasing demand for the currency.
Overcoming Past Challenges
The decision comes after South Korea faced significant hurdles during the Asian Financial Crisis in the late 1990s. Since then, the country has had strict rules on currency trading, which have been a barrier to achieving developed-market status from MSCI, a major global index provider.
Additional Market Reforms
The government is also working on other changes, including:
- Introducing a new system for offshore trading
- Making it easier for companies to participate in the market
These efforts aim to boost transaction demand and make the market more competitive.
Recent Performance of the Korean Won
The Korean won has had a tough time recently, hitting its weakest point since 2009. However, it rebounded thanks to market-stabilizing measures. The government is also focusing on:
- Improving short-selling regulations
- Making securities transactions easier
Economic Growth and Investment
South Korea's economy is expected to grow by 2.0% in 2026, up from previous forecasts. This growth is driven by:
- Strong exports
- Domestic demand
The government is planning to support key industries like:
- Semiconductors
- AI
- Biopharmaceuticals
U.S. Trade Deal Benefits
South Korea is also set to benefit from a $350 billion investment package as part of a U.S. trade deal. This investment will focus on sectors like:
- Shipbuilding
- Nuclear energy
- New U.S. markets
The government is also planning tax incentives to support domestic production.
