Seoul: Finance Minister Koo Yun-cheol announced on Friday that the introduction of tax incentives aimed at encouraging offshore-bound investments to return to the domestic stock market is expected to significantly enhance the foreign exchange supply and demand dynamics in the country.

According to Yonhap News Agency, during his visit to the NH Investment and Securities Co. headquarters, Koo highlighted the potential impact of the "three-part foreign exchange stabilization tax package." This initiative is designed to stabilize foreign exchange conditions by offering attractive tax benefits, including the newly launched reshoring investment account (RIA) product. The RIA allows individual investors to defer capital gains taxes if they reinvest profits earned from overseas stock investments into the domestic stock market for a minimum period of one year.

The three-part package also introduces tax incentives for currency-hedging derivatives and broadens the scope of tax exemptions on dividend income from foreign subsidiaries. These measures are part of the government's broader strategy to address the heightened volatility of the domestic currency in recent times. The Finance Ministry anticipates that these steps will provide a robust framework for stabilizing the foreign exchange market and promoting economic growth.