BENGALURU: South Korea’s won rose more than 1 percent on Wednesday, leading a pack of largely steady Asian currencies, after the country’s national pension fund initiated steps to support the currency, while Asian stocks drifted sideways in holiday-thinned trading.
The won firmed as much as 1.6 percent to 1,458.0 per dollar, its highest point since November 26, after Reuters reported that the National Pension Service (NPS) was conducting a new round of strategic foreign exchange hedging operations, as per sources.
Increasing overseas investment by the pension fund, retail investors and companies has been a drag on the won, which has depreciated 8 percent in the second half of the year. The finance ministry is carrying out a series of measures, including tax policies, to boost capital inflows.
“Taken together, the series of measures will be able to roll back one-sided market expectations for a weak won to some degree,” said Park Sang-hyun, an economist at iM Securities.
The NPS, the world’s third-largest pension fund, is seen as a major force weighing on the won this year, and its hedging operations are expected to support the currency.
In Southeast Asia, the Thai baht briefly touched the 31.00 per-dollar level it has not seen since March 2021, continuing to be driven by traders selling gold in dollars in foreign markets and then selling the US currency for baht.
The baht has surged around 10 percent this year, undermining the competitiveness of Thailand’s exports and tourism sectors, two key drivers of the domestic economy.
Southeast Asia’s second-largest economy is considering a tax on online gold deals, as it tries to arrest the surge in baht, the finance ministry said late on Tuesday.