To Respond More Flexibly to Exchange Rate Fluctuations

The National Pension Service (NPS) will more actively manage the currency composition of its overseas assets.

The National Pension Service (NPS) announced that it would more actively manage the currency composition of its overseas assets in order to respond more flexibly to exchange rate fluctuations with its overseas investment ratio on the increase. This was resolved at its ninth Fund Management Committee meeting for this year held in Seoul on Oct. 30.

The total pension fund under its management and the ratio are estimated to exceed 1,000 trillion won and 50 percent in 2024, respectively. This means exchange rate fluctuations will have a great effect on its investment returns.

“Examples of the tighter management can include an increase in safe currencies such as the U.S. dollar and the Swiss franc in the event of financial market instability and a decrease in volatile currencies in the case of temporary events such as Brexit,” the NPS explained.

“Our future investment will go to funds providing their investment details for hedge fund risk managers as well and this is for more investment opportunities and higher investment returns,” it went on to say. At present, the fund investment of the NPS is limited to those providing such specifics for the NPS itself.

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution