NPS South Korea Prepares Bond Issuance to Strengthen Currency Symbol

South Korea’s National Pension Service (NPS), the third-largest pension fund in the world, will issue foreign currency bonds by the end of 2025 in response to mounting market pressures. This announcement was made by Seuran Lee, Deputy Minister of Health and Welfare of South Korea, who emphasized the need for new strategies to strengthen the won’s symbolic position amid global turbulence.

Won Depreciation Pressure and the Need for Currency Symbol Diversification

The weakening of the South Korean won has posed significant challenges for the NPS in managing its foreign exchange portfolio. Since mid-2025, the won has depreciated approximately 7% against the dollar, prompting the fund to adopt a defensive stance in the foreign forward market to support the stability of the local currency symbol.

This pressure not only affects the NPS but also impacts South Korea’s large-scale investment plans in the U.S. The Seoul government, committed to investing $350 billion in American industries under the trade agreement with Washington, now must consider the risks of further capital outflows that could worsen market conditions.

Foreign Bond Strategy for Currency Symbol Stabilization

The issuance of dollar bonds by the NPS marks the fund’s first-ever initiative of this kind. The strategy aims to diversify funding sources while strategically reducing exposure to exchange rate volatility. By issuing debt instruments in foreign currency symbols, the NPS can manage its long-term obligations more efficiently.

According to Jin10, this decision reflects an urgent need to balance the global portfolio amid ongoing economic uncertainties.

Quadrilateral Coordination to Maintain Financial Market Stability

In a comprehensive effort to address these challenges, the Ministry of Health and Welfare, NPS, Ministry of Finance, and the Bank of Korea will hold their first formal meeting as a quadrilateral consultative body on Thursday. This collaboration is designed to coordinate responses to currency symbol stability issues and broader financial market concerns.

This coordinated step demonstrates South Korea’s government seriousness in integrating investment policies, pension fund management, and macroeconomic stability strategies into a cohesive framework to protect national economic interests.