Overview
- The National Pension Service restarted its strategic currency hedging after extending its swap arrangement with the Bank of Korea and the temporary hedging scheme for another year, according to Yonhap.
- Under the setup, the fund supplies won to the central bank in exchange for dollars for investing or hedging, avoiding spot-market dollar buying and effectively making the fund a net seller of dollars.
- Local FX authorities delivered a rare hard-line verbal intervention labeling the won’s weakness “excessive,” pledging strong policy execution to stabilize markets.
- The won posted its biggest daily gain in more than three years on Wednesday, closing at 1,449.8 per dollar, then strengthened further Friday to about 1,440.3 at 3:30 p.m. after an intraday touch near 1,429.5, with foreign investors buying 1.24 trillion won of Kospi shares by 2 p.m.
- Officials also announced incentives to curb overseas stock buying by individuals, and analysts said the measures should steady sentiment near term while flagging a key test around the 1,450 level into year-end.