MSCI Maintains South Korea as Emerging Market for 15th Year, Cites FX Restrictions

According to BlockBeats, on July 9, MSCI maintained South Korea's emerging market classification for the 15th consecutive year, citing foreign investment restrictions and insufficient offshore won market liberalization. Despite strong performance from chip leaders like Samsung Electronics and SK Hynix, the regulator cited lingering concerns stemming from the 1997 Asian financial crisis, which have prompted South Korea to maintain tight currency controls. While recent reforms include consolidated custody accounts and extended won trading hours, won settlement remains limited to onshore markets, falling short of MSCI's developed market standards. Industry analysts estimate successful reclassification could attract approximately $30 billion in passive inflows, though South Korea's weighting in developed indices could decline to 3% from its current 24% in emerging markets indices.
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