South Korea’s Seoul foreign exchange market commenced 24-hour trading on July 6, marking the first step toward globalizing the won. Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol visited the foreign exchange dealing room at Hana Bank’s headquarters in Jung-gu, Seoul, at 7:30 a.m. on opening day. “The launch of the 24-hour foreign exchange market goes beyond simply extending trading hours \u2014 it is core infrastructure designed to elevate foreign exchange trading accessibility and convenience to the level of advanced markets,” Koo said. “This will serve as a launching pad for the won’s global leap forward.”<\/p>\n
Effective immediately, the Seoul foreign exchange market will operate non-stop from Monday 6 a.m. to Saturday 6 a.m. Trading is now possible every day except weekends and January 1, and the market remains open even on South Korean public holidays. During the period when winter time applies in the United States (daylight saving time ends), opening and closing times shift one hour later to 7 a.m. With this change, won trading hours have been expanded to match those of major advanced-economy foreign exchange markets.<\/p>\n
The Seoul foreign exchange market’s trading hours have expanded steadily over time. From 2005 to 2016, trading ran from 9 a.m. to 3 p.m., and from 2016 to June 2024, it was extended by 30 minutes to 3:30 p.m. In July 2024, hours were significantly lengthened to 2 a.m. the following day, and now the market has fully transitioned to a 24-hour system. However, currency markets other than the won-dollar pair will maintain their existing trading hours.<\/p>\n
Deputy Prime Minister Koo attributed the full-scale opening to “confidence in South Korea’s economic fundamentals \u2014 including sound external soundness and a current account surplus at historically high levels \u2014 and foreign exchange market reform measures reflecting the strong demand from foreign investors, as confirmed by our inclusion in the World Government Bond Index (WGBI).” He added, “With domestic and foreign investors as well as importers and exporters now able to conduct foreign exchange transactions without time constraints, the attractiveness of South Korea’s capital markets and the won will ultimately increase.”<\/p>\n
Bank of Korea Deputy Governor Kwon Min-soo and Hana Financial Group Chairman Ham Young-joo were also present at the event. They received a briefing from Hana Bank staff on the 24-hour trading system and connected via video link with Samsung Electronics’ finance team and Hana Bank’s London branch to hear perspectives from overseas. “We expect the 24-hour opening to broaden and deepen our foreign exchange market,” Deputy Governor Kwon said, while adding, “We will closely monitor market impacts and trends.” Market participants, including Hana Bank, exporting companies, and foreign exchange dealers at overseas branches, voiced a shared commitment to “actively leverage the new foreign exchange market infrastructure to strengthen global competitiveness.”<\/p>\n
The South Korean government and the Bank of Korea anticipate that importers and exporters will gain improved real-time currency risk management capabilities, while domestic financial institutions and brokerages will see expanded business opportunities. From the perspective of overseas investors, the removal of time-zone constraints is expected to significantly enhance the convenience of investing in won-denominated assets.<\/p>\n
To ensure the system’s early stabilization, the government has activated a 24-hour monitoring framework while accelerating follow-up infrastructure development. “Market stability and institutional settlement are the most critical tasks,” Deputy Prime Minister Koo said. “We will support seamless 24-hour monitoring and smooth trading, and push forward with foreign exchange market reform measures without disruption \u2014 including the full launch of the Offshore Won Settlement System in January 2027, which will enable 24-hour settlement and fund transfers.”<\/p>\n
Meanwhile, as the 24-hour trading era begins, market participants are also wary of potential short-term increases in won volatility. While there are expectations that extended trading hours will ultimately lead to greater foreign capital inflows and exchange rate stability, concerns remain that the exchange rate could swing sharply on minor developments until sufficient nighttime liquidity is established.<\/p>\n
In fact, an analysis of daily exchange rate data from Seoul Money Brokerage Services by Maeil Business Newspaper found that the intraday trading range (the difference between daily highs and lows) for the won-dollar exchange rate averaged 16.1 won last month \u2014 the widest since January 2009 (23.0 won) and February 2009 (18.75 won) during the global financial crisis. The average daily range for the first half of this year was 14.54 won, significantly exceeding last year’s average of 11.59 won.<\/p>\n
The recent depreciation of the won is another source of concern. Foreign investors have net sold more than 156 trillion won (approximately $101.9 billion) worth of South Korean stocks this year, pushing the won down roughly 6% against the dollar. That represents the third-largest decline among G20 currencies over the same period, behind only the Turkish lira (-8.23%) and the Indonesian rupiah (-6.56%). The average won-dollar exchange rate in the first half of this year was 1,484.56 won, the second-highest level (meaning the weakest won) since the Asian financial crisis.<\/p>\n
Nevertheless, securities analysts believe the 24-hour trading system will produce positive effects over the medium to long term. The reasoning is that trading demand previously confined to the offshore Non-Deliverable Forward (NDF) market due to time constraints could be absorbed onshore, increasing dollar supply and contributing to won stability. “After the trading hours extension, quarterly won volatility could expand to around 120 won,” said Choi Kyu-ho, an analyst at Hanwha Investment & Securities. “But considering South Korea’s inclusion in global stock indices, the system should be improved over the long term.” Lee Seok-jin, a foreign exchange dealer at Hana Bank, pointed to early-stage market instability, noting, “Until nighttime trading volumes increase, the won could move sharply on even small developments.”<\/p>\n","protected":false},"excerpt":{"rendered":"South Korea’s Seoul foreign exchange market commenced 24-hour trading on July 6, marking the first step toward globalizing…\n","protected":false},"author":2,"featured_media":77064,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,846,41815,10206,12553,15396,41814,8797,28568,41813,4483,3658,850,41812],"class_list":["post-77063","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bok","tag-ham-young-joo","tag-hana-bank","tag-hana-financial-group","tag-koo-yun-cheol","tag-kwon-min-soo","tag-ministry-of-economy-and-finance","tag-non-deliverable-forward","tag-offshore-won-settlement-system","tag-seoul-foreign-exchange-market","tag-south-korean-won","tag-won-dollar-exchange-rate","tag-world-government-bond-index"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/77063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=77063"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/77063\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/77064"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=77063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=77063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=77063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}