Wed Dec 04 05:28:56 UTC 2024: ## South Korea’s Pension Fund Intervenes to Support Won Against Strengthening Dollar
**Seoul, South Korea** – South Korea’s National Pension Service (NPS), the world’s third-largest public pension fund, has been actively selling US dollars in the foreign exchange market in recent weeks, according to sources familiar with the matter. This intervention aims to curb the weakening of the South Korean won (KRW) against a surging dollar.
The NPS, managing over $810 billion in assets, is a significant player in domestic financial markets. While the fund typically refrains from disclosing its investment strategies, sources suggest the dollar sales are related to either tactical foreign exchange hedging or portfolio rebalancing. One source indicated the sales were necessary to maintain the targeted ratio of foreign assets within the NPS’s portfolio. While the exact amount sold remains undisclosed, sources confirm a substantial volume of dollars has been offloaded.
The intervention comes as the KRW recently breached the psychologically important 1,400 won-per-dollar mark for the first time in two years, representing an 8% decline against the dollar in 2024 alone. This continues a four-year trend of won depreciation. The ongoing strength of the dollar globally, partly attributed to factors such as the earlier-than-expected strengthening of the US economy in 2024, has put pressure on many currencies. The NPS’s action represents a notable shift from its previous years of contributing to won depreciation through significant overseas investment outflows, previously estimated at $2-3 billion monthly. The NPS declined to comment on the matter.
First Piper 