[Exclusive] Policy Chief Kim Yongbeom Convenes Economic Issues Meeting with BOK and Finance Ministry

Presidential Office holds meeting with Bank of Korea Governor Rhee Changyong and Second Vice Minister of Economy and Finance Heo Jang
Discussion on key economic issues including the exchange rate and the National Pension Service

On February 3, the Presidential Office checked the current status of responses regarding the exchange rate and the National Pension Service together with the Bank of Korea and the Ministry of Economy and Finance.

According to multiple government officials, Presidential Policy Chief Kim Yongbeom held a meeting on economic issues at the Presidential Office on Tuesday morning with Bank of Korea Governor Rhee Changyong and Second Vice Minister of Economy and Finance Heo Jang, among others.

Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol did not attend due to a scheduled meeting with negotiating blocs at the National Assembly.

A senior government official explained, "I understand that the meeting was arranged to discuss the exchange rate and the new framework for the National Pension Service," adding, "Within the government, there is an opinion that the volume of foreign-exchange hedging by the National Pension Service needs to be increased quickly."

In December last year, when the won-dollar exchange rate broke through 1,480 won, the government identified the first cause of the won's weakness as the supply-demand imbalance stemming from U.S. stock investments and dollar accumulation by the National Pension Service, individuals, and corporations by investor type, and announced market stabilization measures.

However, as the won-dollar exchange rate is still hovering above the 1,450-won level, calls for additional measures are emerging.

On January 28, at the "Global Macro Conference" hosted by Goldman Sachs and held in Hong Kong, Governor Rhee said, "The current target hedge ratio for the National Pension Service is 0%, but in my personal opinion as an economist, I believe the hedge ratio should be raised," adding, "Other hedging instruments and sources of dollar funding also need to be secured."

Meanwhile, four institutions - the Ministry of Economy and Finance, the Ministry of Health and Welfare, the Bank of Korea, and the National Pension Service - are discussing a new framework for the National Pension Service in order to reconcile the fund's profitability with stability in the foreign exchange market.

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