The direct trading market between won and yuan opened on Dec. 1. The Ministry of Strategy and Finance and The Bank of Korea (BOK) are adopting many vitalization plans to quickly settle the direct trading market.
In the morning of the same day, Governor of the BOK Lee Ju-yeol said during a congratulatory speech of the opening of the market at the head office of the Korea Exchange Bank Seoul, “The growth of the won-yuan direct trade market will bring financial vitalization and establish a foundation for both countries’ economic takeoffs by strengthening financial cooperation between South Korea and China.”
In particular, Governor Lee said, “When the won and yuan market matures, transaction costs between the two currencies will drop, and the bilateral trade will rise, contributing to economic growths of the two countries,” adding, “It will provide Korea with an opportunity to be developed into a hub for yuan financing, while expanding opportunities for investment in yuan financial products.”
The government plans to continue supporting the direct trading market between the won and yuan to become a top 3 yuan trading hub with Hong Kong and Singapore.
Korea’s finance minister Choi Kyung-hwan said, “The government will support it for a successful settlement of the market by establishing an electronic brokerage system like the won-dollar market, so that the newly-opened yuan market can be managed as stably and conveniently as possible.”
He added, “Internalization of the yuan is yet insufficient compared to that of the dollar, and the direct trading of yuan isn't common globally. As the yuan becomes internalized in the future, our preemptive investment will shine.”