South Korea's pension fund will adopt more flexible hedging strategies, which will play a greater role in stabilizing the South Korean won.

With South Korea addressing the weakness of the South Korean won, the National Pension Service of Korea will play a bigger role in ensuring currency stability. The management committee of the National Pension Corporation announced on Monday that they will adopt more flexible hedging strategies, but did not provide detailed explanations. The fund will also extend the term of a $65 billion foreign exchange swap agreement with the Bank of Korea by one year, until the end of 2026. South Korea is seeking to boost the South Korean won, as continued outflow of stock market funds and overseas investments have caused the won to depreciate by 8% in the second half of this year. As the largest institutional investor in South Korea, the National Pension Service of Korea holds about $542 billion in overseas assets and often uses hedging and foreign exchange operations to help offset pressure faced by the won.