Final agreement between the foreign exchange authorities and the National Pension Service to carry out foreign exchange transactions worth $10 billion

National Pension “Securing stable foreign investment funds”
Foreign exchange authorities “contribute to the stabilization of supply and demand in the foreign exchange market”

The foreign exchange authorities (Bank of Korea, Ministry of Strategy and Finance) announced on the 23rd that they have reached an agreement with the National Pension Service (hereinafter referred to as the National Pension Service) to conduct FX exchange transactions within the $10 billion limit.

Accordingly, the National Pension Service will be able to acquire foreign currency funds necessary for foreign investment through foreign exchange transactions with the foreign exchange authorities. In addition, the National Pension Service is expected to be able to secure foreign investment funds stably without counterparty risk.

The foreign exchange authorities emphasized that it is expected to contribute to stabilizing supply and demand in the foreign exchange market as the demand for spot exchanges from the National Pension Service decreases. In addition, although the amount of foreign exchange reserves will decrease during the term of the contract through this transaction, it will be returned in full at maturity, so the decrease in foreign exchange reserves will be temporary.

The foreign exchange authorities and the National Pension Service said they intend to start trading as soon as the remaining timetables, such as the signing of the contract, are completed.

Reporter Chae Seon-hee, Hankyung.com csun00@hankyung.com

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