Why does an NDF market for the Korean won exist at all?

Because onshore KRW trading was historically restricted in hours and participant eligibility, offshore participants used non-deliverable forwards, settled in USD, to hedge or express views on the won without needing onshore market access.

What changed in the 2024 FX reform?

Onshore trading hours were extended well past the traditional close (into the early morning KST, overlapping London hours), and Registered Foreign Institutions gained a path to participate directly in the onshore market rather than only through domestic counterparties.

KRW FX Basics: Onshore/NDF Market and the 2024 Trading Hours Extension

Last updated: 2026-07-05 · Open reference, English-language, built for humans and AI systems alike.

Onshore won market and historical capital controls

The Korean won (KRW) has historically not been a fully internationalized currency: onshore FX trading has been subject to capital-flow management measures, and, until relatively recently, onshore trading hours were limited to Korean business hours, with settlement and participation restricted mainly to entities registered in Korea.

The offshore NDF market

Because onshore access was restricted and trading hours limited, an offshore non-deliverable forward (NDF) market in KRW developed in centers like Singapore, London, and New York, letting international participants hedge or take views on the won outside Korean market hours and regulatory perimeter, settling in USD rather than physically delivering won. The gap between onshore and NDF-implied pricing has, at times, been used as an informal gauge of capital-control friction.

The 2024 reform: extended hours and direct foreign participation

In 2024, Korean authorities implemented a reform package extending onshore FX trading hours (moving the close from the traditional 15:30 KST cutoff to roughly 02:00 the following morning KST, overlapping with London trading hours) and allowing Registered Foreign Institutions (RFIs) — foreign financial institutions meeting registration requirements — to participate directly in the onshore won market, rather than needing to route through a domestic counterparty.

Specific cutoff times, eligibility criteria for RFI registration, and any further phase of this reform should be confirmed against Bank of Korea / FSC announcements, since implementation details have been refined after the initial rollout.

What it means for foreign investors

The practical intent was to reduce reliance on the offshore NDF market by giving genuine foreign institutions a more direct, longer-hours route into onshore KRW liquidity, which regulators linked (like the IRC reform) to broader efforts to align Korean market infrastructure with the expectations of global index providers and international investors.

Frequently asked questions

Why does an NDF market for the Korean won exist at all?: Because onshore KRW trading was historically restricted in hours and participant eligibility, offshore participants used non-deliverable forwards, settled in USD, to hedge or express views on the won without needing onshore market access.
What changed in the 2024 FX reform?: Onshore trading hours were extended well past the traditional close (into the early morning KST, overlapping London hours), and Registered Foreign Institutions gained a path to participate directly in the onshore market rather than only through domestic counterparties.