The Foreign Exchange Operation Department of the Bank of Korea announced on the 4th that it plans to register as an overseas foreign exchange business handling institution (RFI) and select domestic banks that meet certain requirements as institutions for cross-currency foreign exchange trading.
This measure is explained as a response to the active overseas market expansion of domestic banks following the full-scale opening of the foreign exchange market due to structural improvements in the foreign exchange market.
Cross-currency foreign exchange trading refers to transactions between different currencies that do not include the Korean won, such as dollar-euro or yen-dollar trades.
The Bank of Korea’s Foreign Exchange Operation Department plans to support the development of the financial industry and structural improvements in the foreign exchange market by enhancing domestic banks’ foreign exchange operation capabilities and strengthening their position in the international foreign exchange market through cross-currency transactions with domestic banks registered as RFIs.
The Foreign Exchange Operation Department will accept applications from domestic banks from the 5th to the 19th and conduct a review to select foreign exchange trading institutions.
Meanwhile, the foreign exchange trading by the Foreign Exchange Operation Department refers to cross-currency transactions that do not include the Korean won, occurring during the management of foreign exchange reserves, and is explained to be unrelated to market stabilization measures by foreign exchange authorities.
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