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

South Korea initiated near-24-hour trading of the won against the U.S. dollar on Monday, a landmark reform for its foreign exchange market. The move is a critical component of the government's long-standing effort to enhance market accessibility and strengthen its case for inclusion in major developed-market equity indexes.

A Major FX Market Overhaul

The new system extends the onshore won-dollar trading window from local business hours to operate almost continuously, five days a week. This change aligns South Korea more closely with global financial centers and allows international investors to trade the currency directly during their own business hours.

Previously, many overseas investors had to rely on offshore non-deliverable forwards (NDFs) to manage their currency exposure outside of Korean market hours. The overnight trading session will be facilitated by designated domestic lenders and registered international banks, with authorities expecting liquidity to increase gradually as more institutions participate, according to a report from Investing.com.

Targeting Developed Market Status

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This reform is central to South Korea's campaign for an upgrade to MSCI's Developed Markets Index. The index provider has persistently cited the country's restrictive foreign exchange market as a key obstacle to reclassification. By extending trading hours and easing other market access rules, Seoul aims to address these concerns directly.

Officials hope that improved access to the foreign exchange market will significantly enhance South Korea's appeal to global investors. The move complements a strong year for local equities, with the benchmark KOSPI index climbing more than 30% in 2026, making it one of Asia's best-performing markets, driven by gains in chipmakers and optimism over corporate governance reforms.

Initial Market Reaction

On the first day of extended trading, the Korean won traded slightly weaker, with the USD/KRW pair rising 0.3%. The move followed a rebound for the currency late last week from its weakest level against the dollar since 2009, reportedly spurred by news of a planned American Depositary Receipt (ADR) offering from chipmaker SK Hynix Inc.