South Korea pension fund suspends FX hedging as won hits two-year high, source says
This comes as the won strengthened to a near two-year high.
South Korea's National Pension Service (NPS), the world's third-largest public pension fund, has suspended foreign exchange hedging operations in response to the won reaching a near two-year high. The suspension, revealed by a market source to Reuters on September 7, comes as the currency continues to strengthen, reaching a peak of 1,334.7 per dollar, the highest level since October 2024.
The NPS, which holds assets worth 1,865.6 trillion won, was previously conducting hedging operations flexibly in 2026, raising its hedging limit to assist policymakers in managing the won's weakness. The pension fund's hedging operations effectively inject dollars into the onshore currency market. The sharp rebound in the won has raised concerns about potential market volatility, as foreign exchange authorities recently purchased around $20 billion in dollars after SK Hynix sold its U.S. shares.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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