The Democratic Party of Korea proposed an amendment to the National Pension Act to support foreign currency financing for the National Pension Service's overseas investments. The core is to allow the National Pension Service to directly issue medium- to long-term foreign-currency bonds overseas and to establish a dedicated subsidiary to raise funds for overseas investment.
An Do-geol, a Democratic Party lawmaker on the National Assembly's Strategy and Finance Committee, held a press conference at the National Assembly press room on the 26th and said, "We need to fundamentally change the financing structure for foreign-currency procurement for overseas investment in a direction that minimizes exchange-rate risk in the National Pension Service's asset management and promotes stability in the foreign-exchange market," adding, "With this awareness of the problem, we have proposed this amendment to the National Pension Act."
The main points of the National Pension Act amendment proposed by An are: ▲ allowing the National Pension Service to directly issue medium- to long-term foreign-currency bonds overseas ▲ preparing a legal basis for short-term overseas borrowing ▲ establishing a specialized subsidiary to raise funds for overseas investment. Through this, foreign-currency investment resources can be increased efficiently and risks from exchange-rate fluctuations can be minimized, An said.
An said, "The key is that we have institutionally opened a path to segregate a significant portion of foreign-currency demand from the domestic foreign-exchange market so that foreign currency can be raised directly in overseas capital markets in a stable and low-cost manner," adding, "By meeting a significant portion of the National Pension Service's foreign-currency demand for overseas investment abroad, we can minimize the shock to the stability of the domestic foreign-exchange market."
An added, "We expect macroeconomic benefits that will contribute to price management and to the operational stability of exporters and small and mid-size companies," emphasizing, "As the National Pension Service is a core player in the global capital market representing Korea, building an advanced foreign-currency financing system is an essential task."