Global index provider MSCI has retained South Korea in its emerging-market category, saying the country continues to face long-standing market accessibility challenges, particularly in its onshore foreign exchange market, according to Reuters.

MSCI said the Korean won remains non-deliverable offshore and that liquidity during extended onshore foreign exchange trading hours is still inadequate to meet the execution standards expected in developed markets. The index provider acknowledged the reforms introduced by South Korean authorities but said investors would require more time to assess whether the changes deliver sustained improvements.

South Korea’s finance ministry and financial regulator said the country’s exclusion from the developed-market watchlist this year reflected the fact that some reforms are still being implemented and their impact has yet to be fully evaluated, Reuters reported. The authorities added that continued progress on foreign exchange and capital market reforms should eventually pave the way for inclusion in MSCI’s developed-market index.

The administration of President Lee Jae Myung has rolled out a series of market reforms since taking office in June 2025, including plans to introduce round-the-clock foreign exchange trading from the second half of this year. Securing developed-market status has been one of the government’s key policy objectives.

MSCI removed South Korea from its developed-market watchlist in 2014, citing restrictions on foreign exchange transactions and other market accessibility concerns.

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