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Government and NPS form working group aimed at stabilizing foreign exchange market

Published: 24 Nov. 2025, 18:01 Updated: 24 Nov. 2025, 18:04

JIN MIN-JI
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A private currency exchange booth in Myeong-dong in central Seoul on Nov. 11 [NEWS1]

Foreign exchange (FX) authorities formed a new consultative body with the National Pension Service (NPS), holding its first meeting Monday to devise measures to stabilize the market as the Korean won continues to weaken against the U.S. dollar.

The meeting brought together officials from the Ministry of Economy and Finance, the Ministry of Health and Welfare and the Bank of Korea, along with representatives from the NPS, according to the ministry.

The body is intended to assess the impact of the NPS' expanding overseas investments on the FX market and to strengthen coordination among the four institutions, it said.

The ministry added that the consultative body will continue discussions on ways to achieve a balanced approach between maintaining the NPS' investment returns and ensuring stability in the FX market.

During a separate meeting held earlier Monday on the pension fund's investment policies, Health Minister Jeong Eun-kyeong said growing FX market volatility could weigh on NPS' overseas investment performance.

“To safeguard the NPS' returns and ensure long-term stability, I ask that we respond swiftly and precisely based on thorough market analysis,” she said.

The health ministry oversees the investment strategies of the NPS, the world's third-largest pension fund, whose growing overseas portfolio has been cited by market participants as a factor weighing on the local currency.

Some observers say the latest discussions could possibly include encouraging the NPS to adopt more active currency-hedging strategies, under which the NPS could sell part of its dollar-denominated overseas assets when the won weakens excessively,

Earlier, the government announced it would develop measures to stabilize the FX market in consultation with market participants such as the NPS and major exporters.

The South Korean won fell further against the U.S. dollar Monday, hitting another seven-month low and nearing its weakest level in 16 years, weighed down by foreign investors' stock selling.

Yonhap