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The Ministry of Economy and Finance building is seen in this file photo released on December 1. / Source: Ministry of Economy and Finance

The government has begun discussions to extend the foreign-exchange swap agreement between the foreign-exchange authorities and the National Pension Service (NPS) as part of efforts to stabilize recent volatility in the won–dollar exchange rate.

The Ministry of Economy and Finance said on December 1 that it convened a meeting the previous day with the Ministry of Health and Welfare, the Ministry of Trade, Industry and Energy, the Financial Services Commission, the Bank of Korea and the Financial Supervisory Service to examine structural conditions in the foreign-exchange market and to push forward stabilization measures.

Deputy Prime Minister and Finance Minister Koo Yun-cheol reportedly called the relevant agencies together to discuss policy responses to exchange-rate swings.

The government has begun detailed consultations on renewing the FX swap arrangement between the authorities and the NPS, which is set to expire at the end of this year.

It will also conduct regular reviews of exporters’ foreign-currency conversions and overseas investment activities, while exploring ways to link these findings with corporate support tools such as policy financing.

The Financial Supervisory Service will carry out inspections through January on securities firms and other financial institutions regarding the adequacy of explanations provided to investors in relation to overseas investment products and their protection measures.

In addition, the government plans to launch discussions within a four-party consultative group to establish a “new framework” that balances the NPS’s investment profitability with foreign-exchange market stability, taking into account changes in the pension fund’s structural conditions.