Revision relaxes currency exchange regulations
Starting next year, Koreans will no longer be forced to go to banks to exchange their Korean won into foreign currencies.
According to the Bank of Korea, under revised legislation on foreign exchange, local residents will be allowed to use private foreign exchange operators. The rule will go into effect starting Jan. 1. Until now, only foreigners could buy or sell off their foreign currencies at private local operators, whereas Koreans could only convert U.S. dollars into Korean won.
The BOK said the change in legislation follows a growing demand from private operators to loosen regulations so that business can be more active.
In the past, those wishing to establish a private foreign exchange business were required to obtain approval from the authorities, though now that requirement has been waived. But unlike banks, their services have been limited. The loosened regulations are expected to help private operators expand their market. In particular, it is expected to attract local customers who may not be able to visit banks during business hours.
Between 2009 and 2012, private foreign exchange operators shrunk, according to the BOK. By 2012, the 1,424 private foreign exchange operators had dwindled to 1,207. However, since 2013 the number of private foreign exchange operators has once again been on the rise, largely thanks to the increase in Chinese tourists.
This year alone, 114 new private operators were established, with the total operators edging up to 1,389.
And because opening a private foreign exchange operation has become easier, the number of retirees running such businesses has increased in recent years.
According to the Ministry of Culture, Sports and Tourism, as of October more than 5.2 million Chinese tourists visited Korea. That’s a 21.2 percent increase compared to the 4.3 million who visited during the first 10 months of 2013. Out of all the foreign tourists who visit Korea, Chinese visitors make up 40 percent.
Most private foreign exchange operators are concentrated around lodging facilities: 471 currently operate at hotels and other accommodation sites. Those operating in an independent venue account for 420.
Other changes were also written in the revised legislation. Now, daily foreign exchanges of less than $2,000 at private operators don’t need to be reported to financial authorities.
Additionally, the ceiling for overseas wire transfers outside Korea has been raised. Before, an individual wiring more than $1,000 in foreign currency had to report it to the authorities. Now, it is $2,000.
BY Lee Ho-jeong [firstname.lastname@example.org]
with the Korea JoongAng Daily
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