SEOUL : South Korea is allowing foreign banks to get quotes for dollar-won transactions from a wider pool of banks in the onshore market as part of efforts to improve market access for foreign investors.

The first case of third-party foreign exchange transaction of won was carried out between Kookmin Bank’s Singapore branch and Deutsche Bank’s London branch, in a swap contract of about 30 billion won ($22.19 million) on May 10, South Korea’s foreign exchange authorities said on Thursday. The transaction was settled on May 14.

South Korea has allowed foreign exchange trading with third parties since last year.

The change allows foreigners to choose trading partners that provide the best offer and means they are no longer restricted to making foreign exchange transactions only at banks where they hold accounts.

In February, South Korea’s foreign exchange authorities said they planned to ease regulations to make it easier for investors to transfer won between Korean bank accounts and allow foreign investors to use overdraft accounts to prevent settlement glitches.

“Many think third-party foreign exchange transactions are not accessible in the Korean foreign exchange market, but it is meaningful that the first case is conducted, which will lead to more cases,” a foreign exchange official said.

($1 = 1,351.8700 won)


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