South Korea Launches 24-Hour Won Trading to Boost Developed Market Bid

South Korea on Monday launched nearly 24-hour trading of its currency against the U.S. dollar, a landmark foreign exchange reform designed to enhance market access for global investors and bolster its long-standing bid for inclusion in major developed-market indexes.

A Major FX Market Overhaul

The move extends the onshore won-dollar trading window from a session limited to local business hours to a near-continuous one, aligning it more closely with global financial centers. Previously, international investors often had to rely on offshore non-deliverable forwards (NDFs) to manage their currency exposure outside of Seoul's trading day.

The new overnight session will be supported by designated domestic lenders and registered international banks. According to the report from Investing.com, authorities expect market liquidity to build gradually as more overseas institutions begin to participate.

Push for Developed Market Status

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This reform is a cornerstone of South Korea's strategy to secure an upgrade to MSCI's Developed Markets Index. The index provider has historically cited restrictions and limited accessibility in the country's foreign exchange market as a significant obstacle to reclassification.

By extending trading hours and easing other market access requirements for foreign investors, Seoul aims to directly address these concerns. Officials hope the changes will strengthen South Korea's appeal and support its case for an upgrade.

Market Context

On its inaugural day, the won traded weaker against the dollar, with the USD/KRW pair rising 0.3%, according to the report. The initiative comes as South Korea's equity market sees strong performance, with the KOSPI index having climbed more than 30% this year, buoyed by an AI-driven rally in heavyweight chipmakers and optimism over corporate governance reforms.