National Pension “To guarantee stable investment funds abroad”
Currency authorities “contribute to the stabilization of supply and demand in the foreign exchange market”
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The exchange authorities (Bank of Korea, Ministry of Strategy and Finance) announced on the 23rd that they had reached an agreement with the National Pension Service (hereinafter referred to as the National Pension Service) to conduct a currency swap operation within the limit of 10 billion dollars.
As a result, the National Pension Service will be able to procure the necessary foreign exchange funds for overseas investments through foreign exchange swaps with foreign exchange authorities. In addition, the National Pension Service should be able to permanently guarantee foreign investment funds without counterparty risk.
The currency authorities have stressed that it is expected to contribute to the stabilization of supply and demand in the foreign exchange market, as the demand for cash spot purchases from the National Pension will be attenuated. Also, although the amount of foreign exchange reserves will decrease during the contractual period through this transaction, it is explained that the decrease in foreign exchange reserves will be temporary as it will be fully paid back on maturity.
Foreign exchange authorities and the National Pension Service have stated that they intend to start negotiating as soon as the remaining programs, including the signing of the contract, are completed.
Chae Seon-hee, Hankyung.com reporter [email protected]
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