SEOUL (Reuters) – South Korea's pension fund and central financial institution have agreed to increase their overseas alternate swap line and prolong it for an additional 12 months till the tip of 2025, a transfer that comes because the received fell to its lowest degree in 15 years.
The swap line, which permits the Nationwide Pension Service (NPS) to borrow towards the central financial institution's overseas alternate reserves for abroad investments, can be expanded to $65 billion from the present $50 billion, it stated. the Financial institution of Korea on Thursday.
This system, seen as a market stabilization device, was first launched in September 2022 and has since been expanded a number of occasions.
“This could assist stabilize the overseas alternate market by absorbing the pension fund's demand to purchase {dollars} within the spot market,” the BOK stated.
The NPS will even preserve its strategic overseas alternate hedging ratio at a most of 10% till the tip of subsequent 12 months, the Social Safety Ministry, which oversees the fund's funding insurance policies, stated after a gathering coverage evaluate.
