Seoul: South Korea's foreign currency authorities announced that discussions have begun on extending their currency-swap arrangement with the state pension operator, as reported by the finance ministry.

According to Yonhap News Agency, the Ministry of Economy and Finance, the Bank of Korea (BOK), the National Pension Service (NPS), and the Ministry of Health and Welfare, which oversees the pension fund, formed a joint consultation body last month due to the weakening of the Korean won against the U.S. dollar. The latest meeting of this four-way body took place on Sunday, where detailed discussions commenced on extending the currency-swap contract set to expire at the end of this year.

The agreement allows the NPS to borrow up to US$65 billion from the BOK's foreign reserves in exchange for its local-currency holdings. Originally established in September 2022 with an initial limit of $10 billion, the currency swap deal's limit was increased to $50 billion in June 2024 and further expanded to $65 billion in December 2024.