A staff member at Hana Bank's dealing room in Seoul's Jung-gu District on July 17, the first public holiday since the adoption of 24-hour trading on the foreign exchange market, monitors the KRW-USD rate. (Yonhap News)

By Xu Aiying

Foreign nationals can soon KRW-denominated accounts at banks abroad.

A government roadmap for the globalization of the domestic currency released on July 19 said people regardless of nationality can freely use the KRW overseas. The core objective is to transform the KRW from a regulated currency to a freely convertible one, removing all restrictions on the raising and use of the currency offshore.

Following the launch of 24-trading on the foreign exchange market, the roadmap permits unrestricted transactions in the country's currency between foreign users using offshore KRW settlement institutions.

This enables more flexible KRW-based trading worldwide among international parties, similar to how Koreans can open USD accounts at domestic banks and transfer greenbacks to one another. To facilitate the final settlement of such transactions between non-Koreans, the Bank of Korea in January will launch an offshore KRW settlement network that operates around the clock.

Regulations on foreign exchange transactions by non-nationals will be also eased. The reporting threshold for capital transactions such as KRW-denominated loans to foreign borrowers will be more than doubled. Another proposal is a higher discretionary limit on bank transfers from onshore to offshore accounts.

Regulatory improvements will continue to ease foreign investments in domestic stocks such as those listed on the main KOSPI and bonds. Among the 25 capital market tasks identified by the Morgan Stanley Capital International, a global index for developed markets, 22 have been completed.

The remaining tasks like infrastructure for automated securities trading and settlement, improvements to investor registration and the expansion of English-language corporate disclosures will be completed in the second half of this year or next year.