The government plans to open the domestic foreign exchange market to overseas institutions from as early as the second half of 2024 with an eye to gradually shift to 24-hour operations.

The decision to open the market and initially extend trading by ten and a half hours was announced on Tuesday as a part of a plan by the finance ministry and the Bank of Korea(BOK) to restructure the foreign currency market.

In a bid to increase access to the market, the government will allow entry by overseas institutions without requiring a local branch or an account with a local institution.

Authorization will be based on adequate liquidity, identification information, and a fulfillment of obligation agreement. Short-term speculative entities, including hedge funds, will not be permitted.

To guarantee the effectiveness of overseas participation, market closing hours will be extended from the current 3:30 p.m. to 2:00 a.m., with authorities considering around-the-clock operations.

The government plans to submit a revision to the foreign exchange transaction law by the third quarter of this year and conduct a trial run early next year.