South Korean Won: Internationalisation roadmap supports won recovery – DBS

DBS Group Research economist Ma Tieying analyses South Korea’s new South Korean Won (KRW) internationalisation roadmap, unveiled by the Ministry of Finance and Economy, Bank of Korea and Financial Services Commission. The plan includes an offshore won market, 24-hour trading infrastructure and regulatory easing. Tieying expects these structural reforms, together with narrowing USD/KRW rate differentials, KOSPI-linked dynamics and a widening trade surplus, to support moderate KRW recovery in 2H26 and beyond.

Structural reforms and cyclical tailwinds for KRW

"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 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."