Korea plans to extend its foreign exchange trading session by 30 minutes in line with its push for longer stock market trading hours, according to the nation’s chief financial policymaker.
Currently, the local currency exchange market is open for six hours between 9 a.m. and 3 p.m. The government now seeks to extend the market hours to 3:30 p.m.
“The Financial Services Commission is pushing for the extension of stock market hours, and (we) will push for that of foreign exchange trading together,” Finance Minister Yoo Il-ho told reporters on the sidelines of a meeting of G20 finance ministers and central bank governors in Washington on Friday.
The government is looking to introduce the extension immediately after it announces related measures by the end of June this year.
In response to concerns that the foreign exchange trading hour extension may lead to a currency fluctuation on the Korean won’s value, the minister said, “Adding a half hour itself won’t be a factor that expands market volatility.”
Four major foreign exchange markets -- New York, London, Tokyo and Sydney -- open nine hours a day on weekdays.
The move comes after the country’s bourse operator Korea Exchange said it plans to lengthen its trading hours of the Seoul bourse by 30 minutes, also kicking off at 9 a.m. and ending at 3:30 p.m., in January.
“If the stock trading hours get stretched, it is right to add more time to foreign currency hours for the foreign investors who are one of the major participants of the market,” Yoo said.
The relatively short stock trading hours have been cited as a major reason for the country‘s failure to be included in the top-tier developed market index of Morgan Stanley capital markets. The KRX also blamed it for saggy trading volume.
In order to globalize the Korean stock market by overlapping its trading hours with those of other Asian markets, the country needs an extension of its own trading hours, the bourse operator said.
The London Stock Exchange and the Euronext have 8 1/2 hours of regular trading. U.S. stock markets’ normal trading hours run from 9:30 a.m. to 4 p.m., with trading available during extended hours.
In Asia, Chinese markets, which Korean markets are increasingly imitating, open at 10:30 a.m. and close at 4 p.m. in Seoul time.
By Park Han-na (hnpark@heraldcorp.com)