South Korea launched won stabilization measures on Monday to address the currency’s continued decline. Authorities said they started talks with the National Pension Service to extend a currency-swap agreement set to expire at the end of the year.
Finance Minister and Vice Prime Minister Koo Yun-cheol led a high-level meeting on Sunday. Officials from the Bank of Korea, National Pension Service, Welfare Ministry, and Industry Ministry attended. They reviewed structural conditions in the foreign-exchange market and agreed to act quickly to balance FX supply and demand.
The won has hovered near 1,500 per dollar despite repeated government efforts. The National Pension Service drives much of the demand because it invests more than half of its 1,300 trillion won fund overseas. Authorities maintain a direct swap line that allows the NPS to secure dollars without buying in the market. The swap line’s cap increased from $50 billion to $65 billion last year.
Officials said the won stabilization measures include a broader plan to balance the NPS’ returns with FX market stability. They will monitor the fund’s parametric reforms and changes to avoid worsening volatility.
Regulators will also tighten oversight of financial institutions, especially securities firms, to improve investor protection for offshore trading. They plan to monitor exporters’ currency conversions and overseas investments. Authorities will explore ways to link these findings to corporate-support tools, such as policy financing.
As of Monday noon, the won traded at 1,470 per dollar, slightly weaker than its earlier level of 1,464.84. An IMF report noted the won averaged 1,418 per dollar from January to November 2025. This marks a 4 percent decline from the previous year and contributed to a nominal GDP drop of 0.9 percent, totaling $1.86 trillion in U.S. dollars.
Finance officials said the won stabilization measures aim to reduce market volatility and strengthen confidence in South Korea’s currency. Analysts expect these actions will ease short-term pressure and support longer-term currency stability.
