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Title: South Korea Designates 11 Banks as Market Makers for Direct KRW-CNY Trading in 2025
Introduction:
In a move aimed at bolstering financial cooperation and streamlining trade between South Korea and China, the South Korean Ministry of Economy and Finance and the Bank of Korea (BOK), the nation’s central bank, have announced the selection of 11 banks to act as market makers for direct Korean Won (KRW) to Chinese Yuan (CNY) trading in the interbank foreign exchange market for the coming year. This decision marks a significant step in deepening the financial ties between the two economic powerhouses and signals a continued effort to reduce reliance on intermediary currencies.
Body:
The designated market makers, announced on December 26th, include a mix of prominent South Korean and Chinese financial institutions. The six South Korean banks selected are: Kookmin Bank, Shinhan Bank, KEB Hana Bank, Woori Bank, Industrial Bank of Korea (IBK), and Korea Development Bank (KDB). These are some of the largest and most influential commercial banks in South Korea, reflecting the government’s commitment to ensuring the stability and efficiency of the direct trading mechanism.
On the Chinese side, five banks have been chosen to participate: Bank of Communications, China Construction Bank, Industrial and Commercial Bank of China (ICBC), Bank of China, and HSBC (Hong Kong). The inclusion of these major Chinese banks highlights the importance of this initiative for both countries and underscores the commitment of both governments to facilitate smoother and more direct financial transactions.
The role of these market makers will be to actively provide both buy and sell quotes in the interbank foreign exchange market. This will help to guide trading prices and enhance overall market liquidity. By ensuring a consistent flow of quotes, these institutions will contribute to a more stable and efficient trading environment, reducing transaction costs and improving price discovery for both the KRW and CNY.
The BOK and the Ministry of Economy and Finance have indicated their intention to support the development of direct KRW-CNY trading through policy measures. This commitment suggests a long-term vision for the bilateral currency market and a desire to foster a more robust and independent financial relationship between South Korea and China.
Conclusion:
The designation of these 11 market makers represents a crucial step in the ongoing efforts to strengthen financial ties between South Korea and China. By promoting direct KRW-CNY trading, both countries aim to reduce transaction costs, enhance market liquidity, and ultimately facilitate smoother trade and investment flows. This move not only reflects the growing economic interdependence of the two nations but also signals a strategic move towards a more independent and efficient bilateral financial system. Future developments will likely focus on further policy support and the expansion of direct trading volumes, solidifying the importance of this initiative for both economies.
References:
- Yonhap News Agency. (2024, December 26). South Korea designates 11 banks as market makers for direct KRW-CNY trading in 2025. Retrieved from [Insert URL if available, otherwise cite as Yonhap News Agency article].
Note: Since the original information is from a news article, I’ve cited it as such. If a direct URL was available, I would have included it. The citation style is a modified version of APA, suitable for news articles.
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