South Korea's finance chief links pension strategy, digital assets to currency stability

구윤철 부총리 겸 재정경제부 장관

SEOUL, January 14 (AJP) - Despite a record current-account surplus, South Korea’s currency market has become more volatile, driven by imbalances in capital flows rather than trade, Deputy Prime Minister and Finance Minister Koo Yoon-cheol said Wednesday.

Koo made the remarks Tuesday in a video address to a symposium hosted at the Korea Federation of Banks building in Seoul, while on a visit to the U.S. The event focused on changes in the foreign-exchange market environment and policy priorities.

He attributed the recent market moves to imbalances in foreign-exchange supply and demand, citing in particular a rapid increase in overseas securities investment by domestic institutions.

The government, he said, is working to strengthen economic fundamentals while also pursuing short-term market responses and measures to improve supply-demand conditions.

Koo highlighted the National Pension Service as a key participant in the market, noting that its overseas assets now exceed South Korea’s foreign-exchange reserves. He said the government would accelerate discussions on a new framework aimed at balancing investment returns with foreign-exchange market stability.

Turning to South Korea’s long-running push to be included in MSCI’s developed-market index, Koo described the effort as essential to enhancing the attractiveness of the country’s capital and foreign-exchange markets and aligning them more closely with advanced economies.

Koo also pointed to digital assets as a potential source of structural change in financial markets, saying their institutionalization could reshape trading beyond traditional financial and foreign-exchange transactions.

On stablecoins, Koo said setting clear rules is an urgent task, adding that the government plans to prepare measures within the year to prevent regulatory circumvention as stablecoins are legalized.

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
Kwon Sung-jin 기자 mark1312@ajunews.com

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