Bank of Korea Formed a Currency Swap Arrangement with Korea’s National Pension Service
Posted on 10/03/2022
On September 23, 2022, the Bank of Korea disclosed it was forming a currency swap arrangement with the National Pension Service of Korea (NPS) to divert some of the pension fund’s currency needs.
“The NPS can secure funds needed for overseas investment without counterparty risks, and the deal is also expected to stabilise currency market by easing the fund’s US dollar demand from the spot FX market,” the Bank of Korea said in a statement back in September.
The Bank of Korea and the NPS said the US$ 10 billion currency swap deal will last through the end of 2022 to allow the fund to access the central bank’s foreign exchange reserves. Like the Japanese yen, the Korean won has weakened against the U.S. dollar.
