Effects and Policy Implications of the Introduction of Currency Futures in Korea

Yunjong Wang; Young-Ho Park

doi:10.11644/KIEP.JEAI.1999.3.2.40

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East Asian Economic Review Vol. 3, No. 2, 1999. pp. 3-28.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.1999.3.2.40

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Effects and Policy Implications of the Introduction of Currency Futures in Korea

Author
Yunjong Wang
Young-Ho Park

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

The market of currency futures of South Korea was opened on April 23rd in 1999. This thesis analyzed the influence of the currency futures market over the foreign exchange market, aiming at observing the possible future of the currency futures market and the enlightenment of the policy. This thesis observed the future of the futures market of South Korea indirectly according to the state quo of the trading of currency futures and the economic function of the currency futures market. In order to answer what the influence of the introduction of the currency futures market over the foreign exchange market was and what the policy which ideals with it was, this thesis first classified the abstracts of former researches. Meanwhile, the result of the empirical analysis showed that the change of the Korea won exchange rate against the US dollar had a close relationship with the exchange rate of currency futures, but it did not affect the fluidity of Korea won (W) against the US dollar ($). In order to stabilize the development of currency futures market and make it play the part of function, while greatly changing the understanding of the risk of foreign exchange, it is necessary for enterprises to supervise the risk control system effectively.

JEL classification: F31, G28

Keywords

Currency Futures Korea, Foreign Exchange

Language

Korean

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