Sending Foreign Currency Abroad to be Allowed from July

One will be able to send great amount of money abroad for paying school tuitions or staying expenses without approval of the Bank of Korea (BOK) from July 1st. And security firms and insurance firms can participate in the foreign exchange market, where only banks and merchant banks have been eligible.

The government will allow individuals to buy foreign real estate freely from 2008, and scrape the bank designating system that one should designate a bank in advance when he or she send money abroad.

The government adopted foreign exchange market developing measure as above after holding a deliberation meeting of finance development committee on the 16th. Kim Song-jin, director general of international financial affair division at the Ministry of Finance and Economy (MOFE) said, “This measure is designed to raise the scale of foreign exchange market and to simplify the regulations over foreign exchange, which had not been deregulated by those two liberalizations in 1999 and 2001. When this measure is executed in 3 stages till 2011, Korea will achieve mid-higher level in foreign exchange liberalization among Organization for Economic Cooperation and Development (OECD) countries. ”

For the 1st stage of the measure, the government scrapes current report system, under which one should get approval of BOK for the remittance of over 100,000 dollars for tuitions and staying expenses, and over 50,000 dollars for gifts. Security companies and Insurers can participate in the foreign exchange market, and the security corporations, which satisfy the necessary conditions like over 100 billion won in equity capital, can trade foreign currency derivatives in the over-the counter market.

Rae-Jeong Park ecopark@donga.com · Joong-Hyun Park sanjuck@donga.com