South Korea expands currency swap with pension fund as won tumbles

SEOUL: South Korea’s foreign switch authorities on Friday (Jun 21) mentioned they agreed with the Nationwide Pension Service to broaden a currency swap line to US$50 billion from the most fashionable US$35 billion to defend the tumbling obtained against the greenback.

“The foreign switch authorities accept as true with that the FX swap with the Nationwide Pension Service can work to alleviate the provision-search recordsdata from imbalance in the foreign switch market by though-provoking the Nationwide Pension Service’s space greenback aquire search recordsdata from when the currency market is unstable,” the finance ministry mentioned in a press originate.

The slump is seen as an indirect intervention into the space greenback-obtained market since the swap line permits the fund to borrow from the central bank’s foreign switch reserves as a replace of in search of to search out bucks in the onshore currency market.

The obtained slid to 1,393.0 per greenback early on Friday, the weakest level since Apr 16 and nearing a key resistance level of 1,400 closely watched by the market participants.