July 16, 2024 09:32 GMT
SOUTH KOREA: Govt Seen Mulling Tweak to NPS Funding to Spread USD Purchases
SOUTH KOREA
- Korea Economic Daily report that South Korea are mulling a tripling of the NPS' advance dollar funding limit, citing government officials.
- Korea Economic Daily writes that "South Korea is considering tripling the maximum amount of US dollars the National Pension Service can buy for advance funding to $3b a month from $1b" and that the measures are to minimize the NPS' influence on FX rates.
- This isn't the first tweak of the NPS' involvement in local FX markets - Recall earlier in June, the SK central bank and finance ministry were pressing for an agreement with National Pension Service to expand the size of their FX swap deal - which was seen being expanded to $50bln from $35bln previously given the NPS' significant presence in the local FX market.
- The objective of the tweak to the dollar funding limit made pretty clear in the Korea Economic Daily piece: "Government wants NPS to spread out dollar purchases over a longer period, instead of buying US dollars in a lump to settle deals"
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