South Korea's NPS Plans Foreign Currency Bond Issuance Amid Currency Fluctuations

South Korea's Ministry of Health and Welfare's First Vice Minister, Seuran Lee, announced plans for the National Pension Service (NPS) to issue foreign currency bonds by the end of the year. According to Jin10, this move aims to enhance financing diversification amid increasing exchange rate volatility. Lee's comments mark the first time a government official has addressed the unprecedented dollar bond issuance plan by the fund. The weakening of the South Korean won has pressured the NPS, the world's third-largest pension fund, to better manage its foreign exchange portfolio to stabilize the currency market. Concerns over additional capital outflows potentially further weakening the won have complicated Seoul's plan to invest $350 billion in U.S. industries under a trade agreement with Washington. Since mid-2025, the won has depreciated approximately 7% against the dollar, prompting the fund to sell dollars in the foreign exchange forward market to support the won. Lee also mentioned that the Ministry of Health and Welfare, NPS, the Ministry of Finance, and the central bank will hold their first formal meeting on Thursday as a quadrilateral consultation body to address financial market stability issues.