Foreign exchange authorities have agreed with the state pension operator to extend their $65 billion currency swap deal by one year, the central bank said Monday. The finance ministry and the Bank of Korea (BOK) have agreed with the National Pension Service (NPS) to extend their foreign exchange swap arrangement, with a limit of $65 billion, through the end of 2026, according to the BOK. The deal had been due to expire at the end of this year. The swap deal was first established in September 2022 with an initial limit of $10 billion. Since then, the limit has been increased to $35 billion in April 2023, $50 billion in June 2024 and further to $65 billion in December 2024. "The agreement is expected to contribute to stabilizing the foreign exchange market by absorbing the NPS' demand for spot dollar purchases during periods of market volatility," the BOK said in a release. Hedging foreign assets through swap transactions "would help the NPS mitigate exchange rate volatility risks associated with its overseas investments and support fund returns," the BOK added. The extension comes as the lo