It was tallied that recent daily volume increased by about 40% compared with the first half of the year before last, prior to the extension of foreign exchange market trading hours. Overseas Registered Foreign Institutions (RFI) participating in domestic foreign exchange market transactions also increased to a total of 79.
The Ministry of Finance and Economy said on the 2nd that it held the Advisory Committee on Expanding Attraction of Foreign Securities Investment, chaired by Second Vice Minister Heo, and stated accordingly. Senior executives from foreign financial institutions such as Citibank, Franklin Templeton, Goldman Sachs, HSBC, JPMorgan, Mizuho, SSBT, and Morgan Stanley are participating in the advisory committee.
According to the ministry, spot transaction volume expanded following the government's foreign exchange market advancement initiative. Starting in early 2023, the government pushed an advancement initiative to shift Korea's foreign exchange market structure from "closed" to "open" for the first time in about 20 years. The core measures were to extend foreign exchange trading hours, originally until 3:30 p.m., to 2 a.m. the next day, and to allow won transactions by overseas Registered Foreign Institutions (RFI).
As a result, the average daily won-dollar spot transaction volume, which was only $11.21 billion in the first half of 2024, expanded to $15.6 billion in January–February this year. In addition, nighttime volume, which was only $1.85 billion in the second half of 2024 when the extension of foreign exchange trading hours was first implemented, increased to $4.21 billion in January–February this year. A total of 79 RFIs have registered to participate in the domestic foreign exchange market.
Vice Minister Heo said, "With new capital inflows beginning following the inclusion of Korea Government Bonds in the World Government Bond Index (WGBI), we will continue to improve the investment environment so that overseas investors can conveniently access Korea's capital market."
Meanwhile, Vice Minister Heo also noted that authorities are keeping a close watch on the foreign exchange market, where volatility has intensified recently. He said, "Recent won volatility is mainly Kiin to external uncertainties stemming from the Middle East war, but some speculative transaction behavior that diverges from our economy's fundamentals is also being observed," adding, "If excessive herd behavior occurs going forward, the government stands ready to respond firmly at any time."