National Pension Service, a Major Player in the FX Market,
Expected to Discuss Measures for Implementing FX Hedging
On the 24th, the status board in the dealing room of Hana Bank in Jung-gu, Seoul displayed the KOSPI, KRW/USD exchange rate, and KOSDAQ index. On that day, the KOSPI opened at 3,915.16, up 61.90 points (1.61%) from the previous trading day; the KRW/USD exchange rate dropped by 3.6 won to 1,472.0; and the KOSDAQ opened at 873.30, up 9.35 points (1.08%). November 24, 2025 Photo by Jo Yongjun
In response to recent exchange rate volatility caused by the ongoing trend of a strong US dollar, the foreign exchange authorities have formed a four-party consultative body with the National Pension Service and other organizations to discuss countermeasures.
The Ministry of Economy and Finance announced on the 24th that it had established a four-party consultative body with the Ministry of Health and Welfare, the Bank of Korea, and the National Pension Service to review the impact of the National Pension Service's expanded overseas investments on the foreign exchange market, and held its first meeting on the same day.
The Ministry of Economy and Finance stated, "Going forward, the four-party consultative body will discuss ways to harmoniously achieve both the profitability of the National Pension Service and the stability of the foreign exchange market."
On this day, the KRW/USD exchange rate closed at 1,477.1 won in the Seoul foreign exchange market, up 1.5 won from the previous trading day. The weekly closing price was the highest in seven and a half months since April 9 (1,484.1 won).
The real effective exchange rate, which reflects the real value of the Korean won adjusted for purchasing power, stood at 89.09 (2020=100) at the end of last month, down 1.44 points from a month earlier. This is the lowest level in 16 years and two months since the end of August 2009 (88.88) during the financial crisis.
According to foreign exchange authorities, the recent deepening weakness of the Korean won has been influenced not only by external factors such as changes in global interest rate trends, but also by the increase in overseas investments by domestic investors.
The National Pension Service is a major player in the foreign exchange market, with annual overseas investments reaching 720 trillion won and the amount of dollar exchanges for overseas stock and bond investments totaling 30 to 40 billion US dollars per year.
At the first meeting, significant attention was reportedly given to ways to reduce the volatility in foreign exchange supply and demand caused by the National Pension Service's large-scale overseas investments.
Given the substantial impact of the National Pension Service, a public institutional investor, on exchange rate volatility, some have pointed out that it should play a role in supplying dollars by raising its foreign exchange hedging ratio.
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