South Korea to launch 24-hour won-dollar trading in July

South Korea's Seoul foreign exchange market will transition to a 24-hour, uninterrupted trading system for the won-dollar currency pair beginning July 6. This significant change, approved by the Financial Markets Committee (FMC), aims to eliminate gaps in trading hours and better align with global market practices.

The revised trading schedule will extend operating hours from the current 9 a.m. to 2 a.m. the next day to a continuous 6 a.m. Monday to 6 a.m. Saturday. This means won-dollar trading will be possible every day except weekends and January 1, including South Korean public holidays. The FMC expects this move to simplify currency exchange processes and lower transaction costs for international investors, exporters, and importers.

Despite the continuous trading, the settlement of transactions will adhere to standard banking practices, occurring only on bank business days. The FMC also noted that trading in other currency pairs, as well as South Korean stocks and bonds, will continue to follow existing schedules, with settlements processed on the next available banking day if a transaction falls on a non-business day.

To accommodate the 24-hour trading, the Seoul foreign exchange market will provide time-weighted average prices (TWAP) every hour on the hour through 현물환중개회사 (spot exchange brokers). Discussions are also ongoing regarding a potential shift in the calculation method for the benchmark rate, moving from the current base rate to a time-weighted average rate, in line with global standards. The relevant foreign exchange transaction regulations are expected to be revised in June.

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The elimination of gaps in foreign exchange trading hours will make currency exchange more convenient and reduce transaction costs for domestic and international investors and import/export businesses.