Overview
- At a Sunday meeting of a four-agency panel, authorities began detailed consultations to extend the National Pension Service–Bank of Korea swap that expires at year-end, keeping the current US$65 billion cap in view.
- The facility lets the NPS obtain dollars from the central bank’s reserves in exchange for won holdings, a mechanism designed to curb market dollar purchases by the fund.
- Policymakers said they will regularly review exporters’ foreign-exchange transactions and overseas investment flows and will conduct a two-month inspection of investor-protection practices at securities firms and other financial institutions.
- Officials outlined work on a new framework to balance the NPS’s return objectives with currency-market stability, and reporting indicates the fund’s strategic hedging rules could come under review, while the finance chief cautioned this is not a short-term mobilization of the pension fund.
- The won has traded near 1,470–1,500 per dollar in recent weeks, and an IMF report noted the currency averaged 1,418 per dollar through November with the dollar conversion of nominal GDP down 0.9 percent from 2024.