Seoul: Foreign currency authorities have agreed with the state pension operator to extend their US$65 billion currency swap deal by one year, the central bank said Monday. The finance ministry and the Bank of Korea (BOK) have reached an agreement with the National Pension Service (NPS) to extend their foreign exchange swap arrangement, maintaining a limit of $65 billion through the end of 2026.

According to Yonhap News Agency, the currency swap deal was initially established in September 2022 with an initial limit of $10 billion. Over time, the limit has been adjusted, first increasing to $35 billion in April 2023, then to $50 billion in June 2024, and further expanding to $65 billion by December 2024.

The BOK released a statement indicating that the agreement is expected to contribute to stabilizing the foreign exchange market. It aims to absorb the NPS' demand for spot dollar purchases during periods of market volatility. This strategic move is seen as a measure to manage market fluctuations effectively.