Foreign Exchange Authorities and National Pension Service Extend $35 Billion Forex Swap Until End of Next Year

[Image source=Yonhap News]

The foreign exchange authorities announced on the 15th that they have agreed to conduct foreign exchange swap (FX Swap) transactions with the National Pension Service within a limit of 35 billion dollars until the end of 2024.

This is a re-agreement to extend the FX Swap transaction limit of 35 billion dollars, which was concluded last April, for one more year.

The foreign exchange authorities explained that they will also consider additional limit expansions if necessary.

Previously, the foreign exchange authorities and the National Pension Service agreed to conduct FX Swap transactions with limits of 10 billion dollars last year and 35 billion dollars this year.

The foreign exchange authorities explained that although the foreign exchange supply and demand has recently improved significantly, the risk of increased exchange rate volatility still exists, so they judged it necessary to maintain market stabilization measures in preparation for emergencies.

They added that the National Pension Service also expects to mitigate exchange rate fluctuation risks associated with overseas investments and to improve the efficiency of foreign currency fund management.

The foreign exchange authorities stated, "Due to this transaction, foreign exchange reserves may decrease partially during the contract period, but since the funds will be fully restored upon maturity, the decrease in foreign exchange reserves will be temporary."