South Korea Plans Incentives to Boost Long-Term Stock Investment and Stabilize Currency Market

Post by : Saif

South Korea is preparing new financial measures aimed at encouraging long-term investment in the country’s stock market, while also working to stabilize its foreign exchange environment. The announcement was made by Finance Minister Koo Yun-cheol on Wednesday, as the government continues efforts to strengthen the economy and support market confidence.

Since President Lee Jae Myung took office in June, the administration has promised reforms to improve the domestic stock market. These moves have contributed to strong performance in the country’s benchmark index this year. The government is now looking to support individual investors who choose to invest steadily over longer periods.

Minister Koo told reporters that the government plans to introduce incentive programs for small investors who stay invested in the capital markets for an extended time or who hold certain stocks for the long term. While he did not clarify when the incentives will begin, the plan signals the administration’s commitment to improving investment conditions and encouraging stability in the financial sector.

At the same time, South Korea is facing challenges in its foreign exchange market. The won has weakened by 0.8% this week, trading at 1,464.8 per U.S. dollar on Wednesday. This comes after sharp gains last week, following the minister’s statement that the government would take action to stabilize the financial system.

Minister Koo said the government is working closely with market participants to prevent excessive instability in exchange rates. He added that he met major exporters who are holding their U.S. dollar earnings overseas instead of converting them back to Korean currency. However, he has not yet held discussions with the national pension fund, which has been increasing its overseas investments.

Koo also spoke about the need for companies to recognize the government’s efforts to support economic growth. He pointed to a $350 billion investment package linked to a trade deal with the United States, explaining that the government is investing taxpayer money to secure lower tariffs that benefit Korean businesses. Therefore, companies should understand the responsibility that comes with these advantages.

A new public entity will soon be created to manage the large investment package and participate more actively in U.S. projects. According to Koo, a bill supporting the plan will be introduced in parliament later this month. He emphasized that South Korea must present its own proposals to the United States and take a leading role in new technological supply chains and advanced industries.

His comments followed similar remarks from the industry minister last Friday, who noted that South Korea had already proposed several project ideas.

With the combination of stock market incentives and measures to protect the currency, South Korea is signaling a strong and proactive economic strategy. The aim is to support local investors, maintain stability, and reinforce the country’s competitive position in the global market.

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