Korean dealers fret about risks in landmark shift to 24-hour won trading

RegulationDigital Finance

โดย Reuters·Read original

Summary · why it matters

South Korea's won will move to 24-hour trading from July 6, with banks trialling the system from Monday, a transition veteran dealers call daunting as Seoul dismantles safeguards in place since the 1997 Asian Financial Crisis. The reform is part of efforts to win MSCI developed-market status, but the won languishes near a 17-year low versus the dollar and is vulnerable to thin liquidity that could amplify price swings. To guard against disruptions, new rules allow offshore investors to hold and trade the currency, introduce an offshore won settlement system, and provide an overdraft policy. Banks are adding night staff, with Hana Bank planning three more hires, Woori Bank doubling its UK team to four, and Shinhan and KB Kookmin adding personnel in London. MSCI kept South Korea in the emerging market category on Wednesday, citing insufficient onshore liquidity even with extended hours, and the next review will be a year from now.