Employees at work at Hana Bank headquarter's dealing room, Monday, as the 24-hour won-dollar spot trading took effect. Yonhap
The launch of the 24-hour won-dollar weekday trading for Korea's onshore market on Monday is a somewhat belated but appropriate push toward gaining developed market status in the MSCI global index and enhanced currency convertibility. Moreover, it should be a move toward stabilizing the weak Korean won.
Monday's step would keep the spot trading open from 6 a.m. through Saturday at 6 a.m., allowing late-hour trading, except on Jan. 1 and during the weekends. It is an easing of a tightly monitored foreign exchange trading system largely set in place after the 1997-98 financial crisis, enhancing currency convertibility. Finance Minister Koo Yun-cheol said that it would be the "starting point for the won's global leap." Yet, the move has both foreseeable benefits and downsides that must be managed through vigilant oversight.
Looking at the 24-hour trading through an optimistic lens, Korean firms will have better access to hedge against late-hour foreign exchange volatility. Korean retail investors who invest in the U.S. bourses would enjoy more convenient access to foreign exchange transactions as well. Foreign investors putting their money in the Korean market can carry out their foreign exchange transactions even after business hours in Asia.
