Second Vice Finance Minister Heo Jang Says, "Government Ready to Act Firmly Against Excessive FX Market Herding"

According to The Financial News, Second Vice Finance and Economy Minister Heo Jang stated on the 2nd, "The recent volatility of the Korean won (KRW) is mainly due to external uncertainty stemming from the war in the Middle East, but we are also seeing some speculative trading behavior that is disconnected from our economic fundamentals." He added, "If excessive herding occurs, the government is prepared to respond firmly at any time."
Heo made these remarks at the Advisory Committee on Expanding Foreign Securities Investment Attraction held that day at Government Complex Seoul.
Heo noted, "Since the extension of foreign exchange market (FX market) trading hours in July 2024, the breadth and depth of the market have been expanding." He explained, "As of January–February 2026, the average daily spot FX trading volume has increased to 15.6 billion dollars, with 4.21 billion dollars traded during the extended hours." He went on to say, "Since January 2024, a total of 79 overseas financial institutions have registered as Registered Foreign Institutions (RFI), which shows that the participation base in the FX market is also broadening."
Heo also said, "The government is pursuing reforms of the foreign exchange and capital markets and improving foreign investor access as key policy tasks." He stressed, "With new capital inflows now beginning following Korea’s inclusion in the World Government Bond Index (WGBI), we will continue to improve the investment environment so that overseas investors can access the Korean capital market more easily."
On this day, members of the advisory committee discussed a range of measures to enhance the accessibility and convenience of the Korean market from an investor’s perspective. They particularly praised the government’s strong commitment to policy reform, including the roadmap for joining the MSCI Developed Markets Index. They also assessed that inclusion in the WGBI has become an opportunity to further align the foreign exchange and capital markets with global standards.
However, they pointed out that applying institutional changes requires on-the-ground preparation, so it will take sufficient time before investors fully feel the impact. They emphasized that, in the long run, a virtuous cycle of feedback based on investors’ positive experiences will be crucial.
Heo said, "Going forward, I hope this advisory committee will serve as a bridge by actively conveying to the government any inconveniences foreign investors experience." He added, "The government also plans to actively promote its efforts to advance the foreign exchange and capital markets and their outcomes, while expanding communication with financial market participants."
syj@fnnews.com Seo Young-jun Reporter