South Korea's Emergency Strategy: The NPS Accelerates Foreign Currency Bond Issuance Amid Currency Crisis

The depreciation of the South Korean won is forcing South Korean authorities to take extraordinary measures to stabilize financial markets. Since mid-2025, the Korean currency has lost about 7% against the dollar, creating significant pressure on the National Pension Service (NPS), the third-largest pension fund in the world. In response, Seuran Lee, the First Vice Minister of Health and Welfare, revealed that the NPS plans to accelerate the issuance of foreign currency-denominated bonds by the end of the year. According to Jin10 sources, this initiative represents an unprecedented strategy to diversify funding sources amid increasing exchange rate volatility.

The won crisis and the pension fund’s difficulties

The weakening of the Korean currency has seriously challenged the NPS’s foreign currency portfolio management, forcing the fund to repeatedly intervene in the forward exchange market to support the won. These dollar sales operations aim to stabilize the currency market but also acknowledge the severity of the situation. Concerns about further capital outflows that could further depreciate the won have complicated Seoul’s ambitious plans to invest $350 billion in U.S. industries as part of a bilateral trade agreement with Washington.

Coordination among agencies: a multidimensional approach

To address the crisis with a coordinated strategy, the Ministry of Health and Welfare, the NPS, the Ministry of Finance, and South Korea’s central bank will hold their first formal meeting as a quadrilateral consultative body. This institutional coordination marks a shift in financial stability policies, aiming to jointly tackle critical issues of market volatility and protect the value of the national currency during this crucial moment for South Korea’s economy.