South Korea confirms launch of 24-hour dollar-won trading from July 6 in MSCI upgrade push

South Korea will launch 24-hour dollar-won spot trading from July 6, with a trial period beginning June 29, as part of a broader foreign exchange liberalisation push aimed at securing an MSCI developed market upgrade. Summary:
All bullets per South Korea Ministry of Economy and Finance statement, May 2026:Dollar-won spot trading will extend to 24 hours from July 6, the first time the market has operated continuouslyA trial period will run from June 29 ahead of the official launchTrading hours will run from 6:00am Monday to 6:00am Saturday Seoul time, shifting to 7:00am starts during US winter timeThe reform is a core government initiative aimed at improving global accessibility of the won and securing an MSCI reclassification from emerging to developed market statusRegulatory changes accompanying the launch include relaxed reporting requirements for non-residents, simplified registration procedures, and the introduction of an offshore won settlement system
South Korea will for the first time allow around-the-clock trading of the dollar-won spot market from July 6, the Ministry of Economy and Finance announced, in the most significant liberalisation of the country’s foreign exchange infrastructure in decades.A trial period will begin on June 29, giving market participants a week to test systems and build liquidity before the official rollout. Under the new regime, trading will run continuously from 6:00am Monday to 6:00am Saturday in Seoul time, with hours adjusting to 7:00am starts during US winter time. The change eliminates the overnight gap created by the previous 2:00am market close, a structural feature that had long been a source of friction for foreign institutions managing won exposure outside Asian trading hours.The reform is part of a deliberate and sequenced effort by Seoul to internationalise the won and improve its standing with global index providers. A reclassification by MSCI from emerging to developed market status is the stated strategic objective, and extended trading hours address one of the most frequently cited barriers to that upgrade, namely the difficulty offshore investors face in managing Korean currency risk in real time during European and US sessions. A successful reclassification would carry significant consequences for capital flows, as passive funds tracking developed market indices would be required to increase Korean allocations.The liberalisation package extends beyond trading hours. South Korea is simultaneously relaxing reporting requirements for non-resident participants, simplifying the registration process for foreign institutions entering the market, and introducing an offshore won settlement system designed to allow global players to manage positions without needing to route everything through Seoul during domestic hours.The timing of the launch, against a backdrop of elevated regional currency volatility linked to Middle East energy disruption and shifting risk sentiment, means the trial period will provide an early test of how the extended market handles stress conditions as well as normal flow.—Round-the-clock dollar-won trading removes a structural inefficiency that has long frustrated offshore participants, particularly those in European and US time zones who have had to manage KRW exposure through less liquid proxy markets or non-deliverable forwards overnight. The reform directly addresses one of the MSCI’s longstanding concerns about Korean market accessibility, and a reclassification from emerging to developed market status would trigger substantial passive inflows as global index funds rebalance. Regulatory simplification for non-residents and the introduction of an offshore won settlement system add further depth to the liberalisation package. Near-term volatility in USD/KRW during the trial period beginning June 29 will be watched closely, as thinner liquidity in extended hours could amplify moves until market depth builds. The reform also arrives at a sensitive moment for the won, with Middle East-driven risk sentiment and global energy price pressures already generating currency volatility across the region.
This article was written by Eamonn Sheridan at investinglive.com.

🔗 Source