This photo taken Dec. 23, 2025, shows a currency exchange booth at Incheon International Airport, west of Seoul. (Yonhap)
SEOUL, Dec. 26 (Korea Bizwire) — The national pension fund has resumed strategic foreign exchange hedging operations as authorities stepped up efforts to stabilize the local currency, sources said Friday.
The National Pension Service (NPS) restarted the program after extending both its currency swap agreement and the temporary strategic hedging scheme for another year, which had been set to expire at the end of this year, according to the sources familiar with the matter.
Under the arrangement, the NPS provides won to the Bank of Korea (BOK) in exchange for U.S. dollars, helping ease demand pressure on the exchange rate because it does not involve purchasing dollars in the spot market.
The NPS uses the dollars obtained from the central bank either for new overseas investments or by selling them to hedge existing holdings. In effect, the NPS becomes a net seller of dollars, which can help support the won.
The move comes as the won slipped below the psychologically important 1,450 won level in November for the first time since April and remained under persistent pressure. On Tuesday, the currency was quoted at 1,483.6 won per dollar, nearing its weakest level in about 16 years.
In response, the authorities made a strong verbal intervention, saying the won’s weakness is “excessive” and that the market will soon see the government’s “strong” commitment and policy execution capabilities to stabilize the foreign exchange market.
Following the verbal intervention, the won posted its biggest gain in more than three years, rising 33.8 won per dollar on Wednesday to finish at 1,449.8.
As of 11:50 a.m., the won was quoted at 1,431.95 per dollar, up 17.85 won from Wednesday. The market was closed on Thursday for the Christmas holiday.
(Yonhap)
