SEOUL: South Korea has pledged to intervene to curb any volatility in the won as the nation extends trading hours for the currency starting next month.
Foreign-exchange authorities will take timely market-stabilising measures in case of excessive swings, the finance ministry said in a statement.
Close monitoring of market trends would also be put into place during the extended hours, it said.
South Korea’s onshore currency will trade until 2am Seoul time from July 1 as the nation bolsters efforts to improve access for foreign investors in a push to get its stocks and bonds included on global indices.
The local currency market is currently open from 9am until 3:30pm.
The government also laid out plans to boost foreign exchange (forex) trading volume during the extended hours.
It will put more weight on the forex trading performance of banks for next year’s selection of forex leading banks.
Forex leading banks are those designated to help bolster trading of the won in return for certain incentives.
It will also enable local banks operating night desks to trade dollar-won non-deliverable forwards electronically for longer hours. In addition, the government will establish a regular communication channel with foreign banks trading the local won.The country has been wary of opening up its currency market after two financial crises in 1997 and 2007 triggered capital outflows, but the stance has been loosening as its market matures and it tries to court global investors.
It will continue to mull the need and timing of additional market opening up measures, including extending won trading window to 24 hours, the ministry said. —Bloomberg
