South Korea’s foreign-exchange regulator said Wednesday it will open its currency market to global traders, extend trading hours and adopt rules to ensure the reform does not lead to price discrepancies.
Asia’s fourth-largest economy will open its U.S. dollar–won market to foreign financial institutions under a pilot program starting in January. It will also extend onshore trading hours to 2 a.m. from July, the finance ministry said.
It also vowed to tighten supervision and adopt global regulatory practices, saying giving foreign investors more access to its markets could lead to more market volatility.
One such measure is to ban the use of shortcut key entries between 3:20 p.m. and 3:30 p.m. local time to prevent speculative orders from causing price fluctuations among those trying to trade just before the end of local trading hours.
Currently, the won can only be traded directly against the dollar through local banks for only six and a half hours a day from 9:00 am (0000 GMT) to 3:30 pm.