▲ Huh Jang, 2nd Vice Minister of Economy and Finance, presides over a press conference with foreign correspondents held at Dalgebi in Jongno-gu, Seoul, on July 2.
The average daily spot foreign exchange trading volume has increased by more than 10% since the round-the-clock foreign exchange market opened on July 6.
The Ministry of Economy and Finance announced that it held the Foreign Exchange Soundness Subcommittee and a task force meeting to push for inclusion in the MSCI (Morgan Stanley Capital International) developed markets index at the Korea Federation of Banks in Seoul on the 14th, chaired by 2nd Vice Minister Huh Jang.
Attendees from the Ministry of Economy and Finance, the Financial Services Commission, the Bank of Korea, the Financial Supervisory Service, the Korea Exchange, and the Korea Securities Depository attended the meeting to review the implementation status and future plans of the comprehensive foreign exchange and capital market roadmap for MSCI developed market index inclusion announced in January.
The government explained that out of 39 tasks across 8 areas in the MSCI roadmap, 30 tasks (77%) have been completed so far, and related agencies agreed to implement 3 additional tasks within this year.
Participants also reviewed trading trends in the foreign exchange market, which has been operating 24 hours a day since July 6.
The government stated, "Since the 24-hour foreign exchange market opening, market infrastructure has been operating smoothly without incidents such as unexecuted trades, and the won-dollar exchange rate has remained stable compared to major currencies."
According to the government, the average daily interbank spot exchange trading volume stood at $17.39 billion in the first half of this year, but increased by about 10.1% to $19.14 billion after the 24-hour opening.
However, participants evaluated that trading during late-night hours is still growing at a modest pace due to the early stage of the system implementation and time differences with overseas markets.
Related agencies decided to assign weight to late-night trading volume when selecting leading banks in the won-dollar market to increase incentives for domestic banks to trade during late-night hours.
Participants also discussed the impact of the surge in domestic stock prices on South Korea's external soundness indicators.
Vice Minister Huh emphasized, "As the KOSPI rose 68% at the end of the second quarter compared to the end of the first quarter, the net external financial assets for the second quarter are expected to decrease significantly," adding, "This has nothing to do with a deterioration in our economy's external soundness."
The government noted that participants shared the view that the decrease in net external financial assets is not driven by worsening fundamentals such as a current account deficit or expanded external borrowing, but rather primarily by an increase in the value of domestic stocks held by foreigners due to improving fundamentals, such as better corporate earnings.
(Photo provided by the Ministry of Economy and Finance, Yonhap News)
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