Currency Diversification Strategy: South Korea's NPS Ready to Issue Foreign Bonds

SorryRugPulled · 2026-02-14T22:15:34+00:00

The National Pension Service of South Korea is implementing a strategic plan to address currency market challenges by issuing foreign currency bonds by late 2025. This move aims to diversify funding sources amid a 7% depreciation of the won against the dollar, enhancing investment portfolio management and stabilizing the domestic currency through inter-institutional policy coordination.

SorryRugPulled

2026-02-14 22:15:34

Abstract generation in progress

South Korea’s National Pension Service (NPS) is developing an ambitious strategy to address the financial challenges facing the currency markets. Seuran Lee, Deputy Minister of Health and Welfare, announced that the third-largest pension fund in the world will issue foreign currency bonds by the end of 2025 as part of its efforts to strengthen investment portfolio management.

Depreciation Pressure on Won Triggers Strategic Actions

Currency movements have become a critical point for the NPS in recent months. Since mid-2025, the South Korean won has weakened approximately 7% against the dollar, creating significant pressure on the pension fund to manage its foreign-denominated assets more carefully. This situation has compelled the NPS to take proactive steps in the foreign exchange forward market, selling dollars to support the stability of the domestic won. This weakening occurs at a critical time, as the global financial ecosystem requires tighter policy coordination.

Foreign Currency Bonds as a Diversification Solution

The planned issuance of foreign currency bonds marks the first time in NPS history, demonstrating a commitment to diversify funding sources amid market volatility. According to Jin10 reports, this decision is designed to enhance portfolio management flexibility and reduce dependence on a single funding source. Seoul’s $350 billion investment plan in the U.S. industry—based on a trade agreement with Washington—is also a key context behind this initiative, as additional capital flows could put further pressure on the won’s exchange rate.

Cross-Institutional Policy Coordination for Market Stability

In an effort to strengthen responses to financial market volatility, the Ministry of Health and Welfare, NPS, the Ministry of Finance, and the Bank of Korea will hold their first formal meeting as a quadrilateral advisory body. This coordination forum aims to address market stability issues holistically, ensuring that monetary, fiscal, and investment policies are aligned. The issuance of foreign currency bonds by the NPS is a tangible symbol of the national strategy to maintain financial market balance amid global economic uncertainty.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.