The news reported that the South Korean National Pension Fund has resumed its strategic foreign exchange hedging operations.

According to sources familiar with the matter, as authorities increase efforts to stabilize the South Korean won, the National Pension Service (NPS) has resumed its strategic foreign exchange hedging operations. It is reported that after extending currency swap agreements and temporary strategic hedging mechanisms for another year, NPS has restarted the plan, which was initially set to expire at the end of this year. Under the arrangement, NPS will provide Korean won to the Bank of Korea in exchange for US dollars, so they do not need to purchase dollars in the spot market, easing the demand pressure on the exchange rate. The US dollars obtained from the Bank of Korea will be used for new overseas investments by NPS, or sold to hedge existing assets. NPS effectively becomes a net seller of US dollars, which helps support the Korean won.