Agreement to Increase Foreign Exchange Swap Limit Between National Pension Service and Foreign Exchange Authorities to $50 Billion
Expectations for Currency Risk Mitigation and Enhanced Efficiency in Foreign Currency Fund Management
The National Pension Service and the foreign exchange authorities announced on the 21st that they have agreed to increase the foreign exchange swap transaction limit to $50 billion by the end of this year. A foreign exchange swap is a short-term financing contract using the form of currency exchange. This increases the transaction limit, which was agreed at $35 billion at the end of last year.
According to the National Pension Service on the day, the two institutions increased the transaction limit to secure additional hedging instruments when raising the hedge ratio in response to the increase in overseas assets of the fund. In December last year, the National Pension Fund Management Committee extended the adjustment of the foreign exchange hedge ratio (0%→10%) to this year to prepare for foreign exchange losses.
Hot Picks Today
As Samsung Falters, Chinese DRAM Surges: CXMT Returns to Profit in Just One Year
- "Most Americans Didn't Want This"... Americans Lose 60 Trillion Won to Soaring Fuel Costs
- Man in His 30s Dies After Assaulting Father and Falling from Yongin Apartment
- Samsung Union Member Sparks Controversy With Telegram Post: "Let's Push KOSPI Down to 5,000"
- "Why Make Things Like This?" Foreign Media Highlights Bizarre Phenomenon Spreading in Korea
The National Pension Service plans to procure dollars through the foreign exchange authorities within the $50 billion limit if necessary. The maturity per transaction will be set at 6 months or 12 months, the same as last year, and neither side will hold the right to early termination this time as well.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
