Deep and liquid financial markets are fundamental to a currency’s ability to attain international status. They reduce transaction costs, making the currency more attractive for international financing and settlement, and – as more liquid markets mitigate rollover risk – they are perceived as safer by investors. [24] The dynamic interaction between debt liquidity and safety is non-trivial, however, as shown in He et al.
It is worth noting the attention Korea has been drawing from the international community for the way in which it overcame the Asian currency crisis and the global financial crisis and the country is expected to contribute to global economic growth in the coming years as well.