Korea’s market upgrade would draw virtuous circle

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Seoul may relax currency rules and short-selling curbs to help win developed-market status from index provider MSCI. Some will resent losing such protection, but the broader benefits are clear, says JennHughes13

South Korean presidential candidate Lee Jae-myung, representing the ruling liberal party, supports the country pushing for an upgrade to developed-market status from index provider MSCI. The country’s citizens go to the polls on March 9.

Finance Ministry officials had already said they were considering changing several rules to facilitate the country’s promotion from emerging-market status. The plans include extending onshore trading hours for its currency as well as easing curbs on foreign firms trading the Korean won offshore. Ending short-selling curbs has also been mooted.

An estimated $3.5 trillion in assets track MSCI’s World, or developed-market, index—almost double the $1.8 trillion tracking its Emerging Market index.Lee Jae-myung, the presidential candidate of South Korea's ruling Democratic Party, bows to his supporters after delivering his speech during his election campaign in Seoul, South Korea, March 3, 2022. REUTERS/Kim Hong-Ji - RC2VUS9XB6JF

 

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