On July 19, the Ministry of Finance and Economy, Bank of Korea, and Financial Services Commission announced a new internationalisation roadmap for the South Korean Won (KRW) [1]. According to DBS Group Research economist Ma Tieying, the plan includes the establishment of an offshore won market, the development of 24-hour won trading and settlement infrastructure, regulatory easing for foreign exchange transactions, and the expansion of available won-denominated assets [1]. These structural reforms are expected to provide medium- to long-term support for the won, particularly if they lead to broader use of the currency in trade settlement, investment, and financial transactions, thereby increasing global demand for KRW [1].
In addition to these structural measures, several short-term cyclical factors are also supporting the KRW. Tieying highlights narrowing USD/KRW rate differentials, KOSPI-linked dynamics, and a widening trade surplus as key tailwinds that are expected to contribute to a moderate recovery of the won in the second half of 2026 and beyond [1].
While the roadmap's success depends on effective implementation, the combination of structural reforms and favorable cyclical trends positions the KRW for potential appreciation over the medium term, according to DBS [1].
CONCLUSION
South Korea's comprehensive roadmap for won internationalisation, combined with positive cyclical factors, is expected to support a moderate recovery of the KRW from 2H26 onwards. The market impact is medium, with the outlook contingent on the successful execution of the announced reforms.