South Korea Signals Better Growth as It Moves to Open FX Market
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rt4goe2t9taq9inntlpgknqq_media_dl_1.png Finance Ministry, Bank of KoreaArticle content(Bloomberg) — South Korea’s government is a little more optimistic about the economy’s prospects than the central bank, striking a more upbeat tone as authorities move to further open the nation’s currency and financial markets to global investors.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentIn its 2026 economic growth strategy report, the government forecast the economy would grow 2% this year, above the Bank of Korea’s 1.8% estimate, the finance ministry said in a statement Friday. Consumer prices are seen rising 2.1%, the same pace as in 2025, it added.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe brighter outlook is driven by firmer domestic consumption and stronger exports, led by semiconductors, while construction investment is expected to turn positive, First Vice Finance Minister Lee Hyoung Il told reporters in a briefing. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe government expects a current-account surplus of $135 billion this year, up from an estimated $118 billion last year, helped by improving trade terms as chip prices recover and energy costs ease.Article contentStill, policymakers acknowledged longer-term constraints. The strategy warned that South Korea’s potential growth rate could fall toward 1% in the 2030s, and near zero in the following decade without structural reforms, underscoring the need to attract capital and boost productivity. Article contentA central pillar for the plan is a sweeping overhaul of foreign-exchange market access. The government said it will fully extend onshore FX trading to a 24-hour system from July, replacing the current structure that closes in the early hours of the morning, and improve links with overseas trading hubs and electronic currency platforms. Article contentA roadmap to promote wider use of the won in international payments and offshore financial transactions will be finalized in the first half of the year. Article contentArticle contentThe FX reforms are part of a broader push to attract foreign investment as South Korea pursues inclusion in global benchmarks such as MSCI Inc.’s developed markets index. The government will complete its phased entry into the FTSE World Government Bond Index this year and continue efforts to align market infrastructure with international standards.Article contentRead Also: MSCI Keeps South Korea’s Emerging-Market Status in Review Article contentAs part of those efforts, officials reiterated plans to establish a Korean sovereign wealth fund, with initial capital of about 20 trillion won ($13.8 billion), drawing on government-held equity stakes and other assets. The fund will operate with independent decision-making and gradually expand its investment footprint, the strategy said.Article contentWith regards to financial stability, the government said it will maintain tight oversight of household debt while supporting growth, and is considering the creation of a dedicated real estate supervisory body. Housing supply will be expanded alongside measures aimed at preventing the buildup of systemic risks tied to property prices and leverage.Article contentThe strategy also reaffirmed the government’s industrial priorities, with artificial intelligence, semiconductors and advanced manufacturing positioned as key growth engines.Article contentIn digital finance, South Korea said it will move to formalize rules for stablecoins, including setting requirements for issuers and reserve assets, while also pursuing the introduction of spot exchange-traded funds linked to digital assets, all steps aimed at bringing crypto markets further into the regulatory framework.Article content—With assistance from Susie Kang and Jaehyun Eom.Article contentTrending Trump once again puts critical Canadian industry in crosshairs Oil & Gas A love letter to those who don’t believe in RRSPs Personal Finance Scotiabank CEO sees 'Trump Doctrine' as positive for growth Banking 'It’s a big market for us': As Carney heads to China, trade diversification gets complicated News How to make a million a year playing disc golf News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. 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