MSCI keeps S. Korea in emerging-market category, citing limited FX market access

South Korea has failed to advance toward developed-market status under the MSCI's latest market classification review.

The index provider on Wednesday kept the country in its emerging-market category, citing limited reforms in the foreign exchange market, and restricted access to investment instruments.

The MSCI noted that despite some efforts to improve market accessibility, progress has been insufficient, and further talks on Korea's reclassification would require the full implementation of reforms and resolutions to all key issues.

The announcement is a blow to Seoul's efforts to eliminate the so-called "Korea discount," whereby Korean firms trade at a lower valuation than their global rivals.