Foreign nationals will be able to freely open won accounts at banks in Korea. The government plans to make it easier for them to conduct won transactions with other foreign nationals.
On the 19th, the government released a "won internationalization roadmap" to allow foreign nationals to freely use the won overseas. The "won internationalization" the government is pursuing aims to convert the won from a regulated currency to a freely convertible currency. The plan is to ensure foreign nationals can procure won offshore and use it without restrictions.
According to the roadmap released by the government, following the move to open the foreign exchange market 24 hours, it will allow transactions among foreign nationals using an "offshore won settlement institution" without restrictions.
As Koreans can open dollar accounts at domestic banks and transfer dollars among themselves, offshore won transactions will be liberalized. To support the final settlement of won transactions between foreign nationals, the Bank of Korea will newly build an "offshore won settlement network" and operate it 24 hours a day starting in January next year.
Given the shortage of offshore liquidity at night, the government also plans to establish rules allowing foreign financial institutions to procure won without limits, via temporary borrowing, for settlement and other needs. It is also reviewing supplying liquidity from the Bank of Korea or the government's Foreign Exchange Stabilization Fund.
Regulations on foreign nationals' foreign exchange transactions will also be eased. For capital transactions such as won-denominated loans to foreign nationals, the prior reporting threshold will be raised to more than double. It is also reviewing raising the autonomous limit for banks to transfer from onshore accounts to offshore accounts.
The government will continue to improve systems so foreign investors can more easily invest in Korean stocks such as the Korea Composite Stock Price Index (KOSPI) and bonds. Regarding the capital-market improvement tasks suggested by MSCI, the government said that, in addition to those already completed, the remaining three tasks—building automated infrastructure for securities transactions and settlement, improving investor registration, and expanding English disclosures—will proceed on schedule without setbacks.