S Korea mulls opening won-yuan market

South Korean Finance Minister Hyun Oh-seok said Thursday that Seoul has positive view on opening a foreign exchange market where currencies of South Korea and China are traded directly.

Hyun told reporters after a meeting hosted by the Korea Chamber of Commerce and Industry that the government "is positively seeing the won-yuan direct transaction market." But he added that demand should be created before launching the market.

Under the three-year economic innovation plan, the Finance Ministry planned to lay grounds for such won-yuan market as part of efforts to develop the country's foreign exchange market.

Hyun said that there should be demand for the won-yuan direct dealings by lifting bilateral trades or raising the need for the usage of the South Korean currency in international settlement and payment.

In 1997, South Korea launched the won-yen direct transaction market where currencies of South Korea and Japan are traded, but it was closed just a few months later due to lack of demand.

The South Korean government has sought to reach currency swap agreements with many countries to reduce its heavy dependence on the U.S. dollar for trade settlements.