The Ministry of Finance and Economy, together with the Bank of Korea and the Financial Services Commission, announced the KRW internationalization roadmap on July 19. Key measures include establishing an offshore won market, developing 24-hour won trading and settlement infrastructure, easing foreign exchange transaction regulations, and expanding the range of available won-denominated assets.
The roadmap forms part of the government’s broader financial reform agenda to strengthen Seoul’s position as a financial center. It complements other initiatives, including the inclusion of KTBs in the WGBI and South Korea’s ambition to secure inclusion in MSCI’s developed market index. The initiative also comes against a favorable global backdrop, with the AI boom enhancing South Korea’s strategic importance in global trade, supply chains, and financial markets. South Korea has become the world’s fifth-largest exporter this year, while the KOSPI has entered the top 10 global equity markets by market capitalization.
The roadmap could provide structural support for the won over the medium to long term. If successfully implemented, broader use of the won in trade settlement, investment, and financial transactions could generate stronger global demand for KRW.
From a short-term cyclical perspective, the KRW is benefiting from several emerging tailwinds. The USD-KRW interest rate differential is narrowing following the Bank of Korea’s recent initiation of a rate-hike cycle. Meanwhile, USD/KRW has recently exhibited a positive correlation with the KOSPI, which is undergoing a correction phase following the introduction of stricter regulations on leveraged ETFs. Korea’s trade surplus also continues to widen, supported by robust semiconductor exports. These cyclical factors should support a moderate KRW recovery in 2H26.
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