South Korea Targets Developed Market Status With Round-The-Clock FX Trading

South Korea will extend onshore foreign exchange trading to a 24-hour system from July, allowing transactions until 6am when US stock markets close, as part of efforts to secure developed market status from global index provider MSCI.
 

The initiative forms a central pillar of the government's 2026 economic growth strategy report, unveiled by the Finance Ministry on Friday, which outlined a comprehensive roadmap for reforming the nation's currency and capital markets.

Currently, South Korea's forex market operates from 9am until 2am the following day. The extension aims to eliminate the trading gap and address global investors' concerns about market access.

First Vice Finance Minister Lee Hyoung Il told reporters the reforms are designed to facilitate won internationalisation and attract foreign capital.

"The brighter outlook is driven by firmer domestic consumption and stronger exports, led by semiconductors, while construction investment is expected to turn positive," he said during a briefing.
 

The government forecast economic growth of 2% for 2026, above the Bank of Korea's 1.8% estimate, with consumer prices expected to rise 2.1%, matching 2025's pace. The current-account surplus is projected at $135 billion this year, up from an estimated $118 billion in 2025.
 

The Finance Ministry said the roadmap targets six areas MSCI currently rates as insufficient, including FX liberalisation, investor registration, clearing and settlement, information flow and the availability of investment instruments.
 

South Korea entered MSCI's emerging market index in 1992 and was placed on the watch list for developed market inclusion in 2008, only to be removed in 2014. The government tentatively aims for placement on MSCI's watch list in June, which could enable developed-market inclusion as early as 2027.
 

Global funds tracking the MSCI developed markets index are estimated at approximately $16.5 trillion, compared with tracking funds for the emerging markets index which are only one-fifth of that amount.
 

The ministry said it will finalise a roadmap to promote wider use of the won in international payments and offshore financial transactions in the first half of the year. The government will also improve links with overseas trading hubs and electronic currency platforms.
 

South Korea will complete its phased entry into the FTSE World Government Bond Index this year and continue aligning market infrastructure with international standards.
 

Officials reiterated plans to establish a Korean sovereign wealth fund with initial capital of approximately 20 trillion won ($13.8 billion), drawing on government-held equity stakes and other assets. The fund will operate with independent decision-making and gradually expand its investment footprint.
 

The strategy warned that South Korea's potential growth rate could fall towards 1% in the 2030s and near zero in the following decade without structural reforms, underscoring the need to attract capital and boost productivity.
 

In digital finance, South Korea will formalise rules for stablecoins, including requirements for issuers and reserve assets, whilst pursuing the introduction of spot exchange-traded funds linked to digital assets.

The government said it will maintain oversight of household debt whilst supporting growth and is considering creating a dedicated real estate supervisory body. Housing supply will be expanded alongside measures preventing the buildup of systemic risks tied to property prices and leverage.
 

The strategy reaffirmed industrial priorities, with artificial intelligence, semiconductors and advanced manufacturing positioned as key growth engines.
 

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