SEOUL, July 2 (Xinhua) -- South Korea will open its foreign exchange market 24 hours a day starting July 6, planning to launch an offshore Korean won trading system in the first half of next year to transform its local currency into a "fully convertible currency."
Huh Chang, vice minister of Finance and Economy, said at a briefing with foreign correspondents in Seoul that the domestic currency will transform itself from a restricted convertible currency into a fully convertible currency as the foreign exchange market will be opened day and night with the planned launch of the offshore won trading system.
Addressing concerns about potential nightly volatility and low trading volume, Huh expressed strong confidence in a stable transition, saying the government already extended trading hours to 2:00 a.m. local time for the past two years, during which nighttime trading volume and its share doubled.
Huh explained that since the non-deliverable forward (NDF) market had already been active at night, it was not as if there was no FX market operating during those hours, vowing to actively provide liquidity if necessary and closely monitor the market round-the-clock.
Regarding the recent exchange rate fluctuations, he acknowledged that there was a herding behavior compared to the Asian country's economic fundamentals, but he pointed out that South Korea's booming export economy would serve as a strong stabilizer.
The vice minister emphasized that the country recorded a current account surplus of about 100 billion dollars from January to April alone, projecting that the total annual surplus could reach nearly 300 billion dollars this year, three times larger than last year's figure.
The South Korean won versus the U.S. dollar exchange rate finished its daytime session at 1,555.8 won per dollar as of 3:30 p.m. local time (0630 GMT), up 0.9 won from the previous session's daytime close.
It was almost 8 percent higher than 1,441.5 won at the beginning of this year.
South Korea's exports spiked 70.9 percent from a year earlier to 102.25 billion U.S. dollars in June, topping 100 billion dollars for the first time, thanks to surging demand for locally-made semiconductors.
Semiconductor exports skyrocketed 199.5 percent to reach an all-time high of 44.82 billion dollars, topping 40 billion dollars for the first time in June. ■
