Seoul: The Republic of Korea has again failed to be put on a watch list for an upgrade in market status by global index provider Morgan Stanley Capital International (MSCI), the index provider said Wednesday.

According to Emirates News Agency, the MSCI noted that Korea needs to work on its foreign exchange market reform and diversify investment instruments. The decision came after MSCI's annual market accessibility report released last week, which highlighted that foreign accessibility to Korea's equity and currency markets remains limited. This is despite several reform measures, including the extension of trading hours and the allowance of foreign investors to participate in the onshore foreign exchange market.

The global index provider also pointed out the absence of an offshore currency market and existing constraints on the onshore market. MSCI emphasized that it will continue to monitor developments to assess Korea's market stability and the consistency of its regulatory framework over time.

MSCI reclassifies its watch list of emerging and developed markets every year in June. The classification is based on factors such as economic development, the size and liquidity of equity markets, and market accessibility for foreign investors.