NPS, Bank of Korea renew $35B currency swap deal until end of 2024

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NPS, Bank of Korea renew $35B currency swap deal until end of 2024

Published: 15 Dec. 2023, 16:15

PARK EUN-JEE
park.eunjee@joongang.co.kr

An employee organizes stacks of dollar bills at Hana Bank's Counterfeit Notes Response Center in Jung District, central Seoul on Dec.5. [YONHAP]

Korea’s National Pension Service (NPS), the world’s third-largest pension fund, and the Bank of Korea (BOK) agreed to extend their $35 billion currency swap deal by one year until the end of 2024. The swap line was due to expire this month.

The Finance Ministry and the BOK said the renewal arrangement is part of efforts to ease market volatility.

In April, the NPS and the BOK agreed to open the currency swap line.

The agreement, which will run through the end of next year, will allow the NPS to borrow up to $35 billion from the foreign reserves of the Bank of Korea in exchange for its local currency holdings, according to financial authorities.

The deal is aimed at easing dollar demand in the spot market from the NPS for its overseas investments to help curb the excessive ups and downs in foreign exchange rates.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]