South Korea Launches 24-Hour Won Trading in Major Developed Market Push

South Korea officially launched 24-hour trading of its currency, the won (KRW), against the U.S. dollar (USD) on Monday, July 6, 2026, marking one of the country's most significant foreign exchange market reforms in decades. This landmark move aims to enhance market accessibility for international investors, strengthen the won's global presence, and bolster Seoul's long-standing bid for inclusion in the MSCI Developed Markets Index. The expanded trading hours now allow overseas investors to trade the currency outside traditional Asian business hours, aligning South Korea's FX market more closely with major global currency markets.

The new trading regime commenced at 6:00 a.m. Seoul time on Monday and will operate continuously until 6:00 a.m. on Saturday, excluding weekends and public holidays. South Korean Finance Minister Koo Yun Cheol attended the opening ceremony at Hana Bank, where a $10 million dollar-won selling order was executed on behalf of Samsung Electronics (005930.KS). Authorities stated that this extended trading window will integrate the onshore won-dollar market, previously largely limited to local business hours, with global market operations. The overnight trading session will be supported by designated domestic lenders and international banks registered to participate in the local foreign exchange market. The government anticipates that liquidity will gradually build as more overseas institutions join the market.

This reform package is considered the most significant foreign exchange liberalization by South Korea since the 1997 Asian financial crisis. Following that crisis, authorities maintained strict controls over foreign exchange transactions for decades to shield the won from speculative attacks. As part of the broader reform, the government has also eased market access requirements for foreign investors and plans to establish offshore won settlement systems. These measures will enable foreign financial institutions to directly hold won accounts domestically and manage won transactions.

On Monday, the won traded weaker against the U.S. dollar, with the USD/KRW pair rising 0.3%. This came after the currency had rebounded late last week from its weakest level against the dollar since 2009. The won has depreciated by approximately 6% against the greenback so far this year, making it one of the world's worst-performing currencies. While analysts expect won liquidity to deepen over time and bid-ask spreads to narrow, they also caution that short-term volatility might increase during overnight sessions when liquidity can be thinner.

For years, South Korea has aggressively pursued an upgrade from MSCI's emerging-market classification to developed-market status. MSCI has consistently cited restrictions in the country's foreign exchange market, including limited accessibility, onshore liquidity, and offshore won convertibility, as key obstacles to reclassification. In its latest 2026 annual market classification review, released in June, MSCI acknowledged Seoul's reform efforts but decided against adding South Korea to its watchlist for an upgrade. This decision was attributed to some tasks still being under institutional improvement and the need for more time for the market to perceive the effects of completed reforms.

Experts view the extended trading hours as a necessary step to elevate the won's presence in global financial markets. However, the risk remains that extended hours without sufficient liquidity could lead to increased volatility during off-peak sessions. Analysts suggest that the won is likely to remain under pressure unless foreign investors slow their selling of local equities, the U.S. dollar loses momentum, or U.S. Treasury yields decline more decisively. The South Korean government has affirmed its commitment to maintaining seamless monitoring and providing support for frictionless round-the-clock trading.