First Vice Minister Kim Byoung-hwan convened an Investor Relations session with global investors in London on February 5. During the meeting, he provided insights into the current state of the Korean
Economy as well as the policy directions, and discussed the progress and future plans regarding the ‘Improvement Measures for Foreign Exchange Market Structure’, which has drawn vast interest from
foreign investors.
Ahead of the upcoming IR meeting, the Ministry of Economy and Finance has sought input from prominent global equity and bond investment institutions about obstacles to access the Korean Foreign
Exchange (FX) market. The majority of the foreign investors, including those attending the IR, spoke highly of the government’s recent actions that open the FX market to foreign banks and significantly
expand trading hours until 2 a.m., aligning with the closing time of the London FX market. They expressed their anticipation that such changes will not only benefit participants in the interbank FX market
but also enhance the convenience of foreign stock and bond investors, who are actual FX market players.
During the meeting, VM Kim vowed to pursue improvements to the relevant FX systems in the first quarter as foreign investors requested that the settlement failure risks be managed in accordance with global standards so that they conveniently exchange currencies with a broader range of FX banks and across different time zones. The specific measures will be announced in February after discussions with relevant institutions including the Financial Services Commission and the Bank of Korea.
Furthermore, VM Kim took the opportunity of this meeting to correct misunderstandings among some foreign investors who mistakenly believed that the hedging capacity for investments in Korean Won-dominated assets made by foreign financial institutions is limited to the scope of actual demand (the value of invested Korean Won-dominated assets).
VM Kim highlighted that the FX market reform measures are an ‘important first step’ to upgrade accessibility to the Korean Won for foreigners to the level of advanced currencies. He also expressed his commitment to constantly listen to the voices of investors and work towards the sustained improvement of FX systems and infrastructure.
As the meeting concluded, VM Kim added that efforts are also being made to enhance the attractiveness of the Korean capital market through initiatives such as the ‘Corporate Value-Up Program’. Participants showed strong support, saying that such efforts by the government would crucially contribute to elevating the Korean capital market’s status.
Please refer to the attached files.
