Starting in 2027, Korea plans to allow offshore won transactions and ease capital rules to make its currency more accessible globally.
The Korean government will allow foreign investors to conduct won transactions through accounts opened at overseas financial institutions as early as 2027, part of a broader push to internationalize the Korean currency amid its persistent depreciation against the dollar and others.
A set of measures, announced by the Ministry of Finance and Economy on Sunday, is aimed at transforming the won from what it calls restricted currency into a freely convertible one.
Presently, foreign investors must route all won transactions through accounts at banks in Korea, a rule long cited as a key barrier to entering Korea’s capital markets.
“Let’s say you want to open a won-denominated account at a JPMorgan branch in New York — you simply can’t, because there is no settlement system to handle the task,” said a senior Finance Ministry official, adding that such transactions will be possible once the institution registers with the ministry.
The offshore settlement system will be built by the Bank of Korea as early as January, 2027, according to the official.
The official reference exchange rate will be also calculated differently starting the first month of 2027 in a bid to align Korea with international practice. The current method averages every trade between 9 a.m. and 3:30 p.m. in Seoul. The new method will take a snapshot of trades in a five-minute window around 4 p.m.
Another pillar is to lift the requirements about advance government filings for many cross-border capital transactions using the won. The ministry will raise the money thresholds that trigger these filings to at least double current levels, with a plan to release details by September 2026.
The announcement follows the launch of the round-the-clock trading on weekdays earlier this month.
The foreign exchange trading runs from 6 a.m. on Mondays to 6 a.m. on Saturdays, while remaining open on Korean public holidays, except weekends and New Year’s Day. Previously, dollar-won trading ran from 9 a.m. to 2 a.m. the following day on weekdays.
Still, it remains to be seen whether the improved accessibility could end up boosting investment appetite for won-based transactions.
“The goal is to let foreigners hold and use the won without any hesitation or concern. Once that happens, they will naturally invest more in won-denominated assets, and they will be able to settle trades in won as well,” the official said during a press briefing on Thursday.
So far, there has been no significant uptick in trading since the new system, according to a source.
“Trading hours have been extended, but overnight volume hasn’t been that large,” said a banker at a foreign bank operating in Korea.
BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
