South Korea Pension Fund Increases Hedging Limit
2022.12.16 03:01
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South Korea Pension Fund Increases Hedging Limit
Budrigannews.com – The welfare ministry announced on Friday that South Korea’s enormous National Pension Fund (NPS) will hedge foreign exchange risks for up to 10% of its overseas investments, up from zero at the moment.
Following a meeting of the panel that oversees the fund’s investment policies, the ministry issued a statement that stated, “If foreign exchange rates rise to unusually high levels again, it is necessary to temporarily reduce the size of the foreign exchange exposure until the rates stabilise.”
The proportion of FX supporting will depend on 10%, temporarily period, contingent upon market conditions, the service said without subtleties.
If the ratio changed primarily as a result of wildly fluctuating prices, the fund will also be permitted to hold foreign stocks in excess of the allowed ratio in relation to the total.
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The choice comes a month after the money service mentioned the benefits asset to build the proportion of supporting unfamiliar resources to lessen the asset’s effect on the inland spot market from dollar-purchasing exercises.
The asset has filled in size and its rising acquisition of dollars for venture abroad has been faulted for worsening the dollar/won’s now rising pattern lately.
In October, the South Korean won fell to its lowest point in 13 years, trading at 1,444.2 per dollar. This level was last seen during the Asian crisis in the late 1990s and the global financial crisis in 2008-2009.
