Won-USD exchange market hours will extend to 2 a.m. next month

Monday's won-dollar exchange rate displayed on a screen in Hana Bank's trading room in central Seoul [YONHAP]

The trading hours for won-dollar exchange market will be extended to 2 a.m. starting July 1, allowing investors in overseas stocks to trade at market exchange rates late into the night.

The extended trading hours are a move to increase convenience and reduce transaction costs for investors, the Seoul Foreign Exchange Market Operation Committee said Sunday.

The current won-dollar trading hours are 9 a.m. to 3:30 p.m.

The trading hours for the won and other foreign currencies will remain unchanged, according to the foreign exchange committee’s news release.

Additionally, the committee will abolish a regulation that suspended electronic trading for the 15 minutes directly after the market's opening and directly before its closure.

The extended hours will allow foreign investors trading Korean stocks and bonds to exchange dollars for won in real time until 2 a.m., covering the London financial market's hours.

Domestic investors who trade U.S. stocks and bonds overnight can also exchange at real-time market rates instead of provisional rates.

Previously, such traders had to exchange currencies at a higher rate through securities companies in order to invest in overseas stocks after the foreign exchange market closed. Securities companies set a provisional exchange rate 5 percent higher than the market exchange rate, taking fluctuation into consideration.

The Ministry of Economy and Finance and the Bank of Korea (BOK) are also set to focus on maintaining adequate liquidity to ensure smooth transactions during the extended hours.

The parties plan to revise regulations to encourage domestic banks to actively offer buy and sell prices during night hours.

Foreign exchange authorities will closely monitor the market to prevent excessive volatility during night hours and take timely market stabilization measures if necessary.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]