South Korea launched a forex hedging program to stabilize the won, which strengthened after a 7% drop in late 2025.

South Korea’s National Pension Service has launched a new foreign exchange hedging program to stabilize the won, which strengthened nearly 1.6% to 1,458.0 per dollar—the strongest in a month. The move, aimed at countering a 7% decline in the won during the second half of 2025, is part of broader government efforts including a $65 billion currency swap line, tax incentives for repatriating overseas assets, and measures to boost domestic investment. The Bank of Korea is supporting the effort by paying interest on reserve deposits to offset swap losses. Officials warn against excessive won weakness, signaling strong policy resolve. Analysts expect the exchange rate may stabilize around 1,450 in coming months.