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South Korea Eases FX Rules and Taps NPS–BOK Swap to Bolster Won

Officials aim to boost dollar supply to counter currency-driven inflation risks.

Overview

  • The government unveiled measures to increase onshore dollar liquidity, suspending advanced FX liquidity stress tests for financial institutions until end-June and raising foreign banks’ forward-position cap to 200%.
  • Authorities also eased rules so exporters can use foreign‑currency loans for domestic working capital and moved to encourage inflows by clarifying professional investor status and promoting integrated accounts for foreign investors.
  • The National Pension Service activated its FX swap line with the Bank of Korea after extending the arrangement to a $65 billion ceiling, enabling the fund to source dollars without onshore purchases.
  • Finance, banking and market regulators pledged timely action after a high‑level meeting, saying market stability remains intact even as currency volatility increases.
  • The won traded around 1,478–1,482 per dollar this week as the central bank cautioned that a rate near 1,470 could push headline inflation above earlier forecasts and deepen distributional pressures.