South Korea is preparing new incentives to encourage long-term participation in its stock market as part of broader efforts to reinforce financial stability and enhance the country’s trade competitiveness, the finance minister announced on Wednesday.
Since President Lee Jae Myung took office in June, the administration has introduced reform commitments aimed at improving market conditions—initiatives that have contributed to a strong performance in the benchmark stock index this year. These measures are viewed as part of a long-term strategy to create a more resilient financial environment that can better support exporters and global trade activity.
The South Korean won weakened by 0.8% this week, trading at 1,464.8 per dollar on Wednesday. This follows last week’s gains after Finance Minister Koo Yun-cheol reaffirmed the government’s readiness to stabilise markets amid shifting global financial flows.
Koo said upcoming incentive measures will focus on supporting small investors who commit to long-term market participation—an approach expected to strengthen domestic capital formation, which plays a key role in supporting businesses engaged in international trade.
On foreign exchange trends, Koo emphasized that the government is working closely with market participants to limit volatility and maintain stable exchange rate conditions. He noted recent discussions with major exporters retaining U.S. dollar earnings abroad, underscoring the link between FX management and trade-related cash flows. A meeting with the national pension fund, which continues to expand its overseas investments, is anticipated.
Koo also referenced a $350-billion investment package tied to a trade agreement with the United States. A new entity will be established to manage these funds and take a more active role in U.S.-based projects. A bill is expected to be introduced in parliament this month. The initiative is positioned to strengthen South Korea’s participation in emerging global value chains and support new growth sectors.
These plans align with earlier statements from the industry ministry indicating that South Korea has already put forward several project proposals to international partners.
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