South Korea’s government decided to extend foreign exchange (FX) trading by 30 minutes, to match up with the planned elongation of the nation’s stock trading hours from 9 a.m. to 3:30 p.m.

According to Yoo Il-ho, minister of Strategy and Finance who doubles as deputy prime minister for economic affairs, on Friday (local time), during a press briefing held after the G20 financial ministers and central bank governors meeting in Washington, D.C., the Financial Services Commission (FSC) plans to extend both sessions of the stock and FX trading and will shortly announce its measures regarding longer FX market trading hours by the end of June.

Currently, Korea’s foreign exchange market involves the domestic transactions of banks and futures trading firms between 9 a.m. and 3 p.m. and the offshore non-deliverable forward (NDF) trades for 24/7.

The nation’s won-dollar spot market, in particular, is poised for extension of trading hours, after its sole securities exchange operator Korea Exchange (KRX) decided to lengthen trading hours of the Korean bourse by 30 minutes from 9 a.m. to 3:30 p.m. early this year.

The KRX seeks to stretch the stock trading hours, citing its comparably shorter duration than those of the U.S., Europe and Singapore stock markets. It also added the need of overlapping its trading hours with the Asian regional markets, to strengthen its global presence.

In line with this, Seoul decided to delay the closing time of its FX market to match up with longer stock trading hours, to allow last-minute foreign investors to exchange dollars with Korean won to purchase Korean stocks between 3 o’clock to 3:30 p.m.

Moreover, the nation’s continued effort to upgrade its stock status in the Morgan Stanley Capital International (MSCI) indices to developed rank from current emerging market category, added to the reason for longer FX trading hours to boost its trading volume which in turn, will help the Korean bourse join the MSCI’s developed market indices.

However, some voice concerns about probable cons – longer FX trading hour possibly prompting a currency fluctuation in the won’s value – despite the expected pros, bigger stock trading volume.

By Han Ye-kyung, Chang Young-suk

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]