The head of South Korea's largest pension fund has indicated that the recent depreciation of the Korean won against the US dollar amid market volatility may necessitate measures to stabilize the currency.

In an interview on Friday, Kim Sung-joo, Chairman and CEO of the National Pension Service (NPS), dismissed the idea that the won's recent decline to around 1,500 per US dollar represents a "new normal." He stated that a level just above 1,400 is a more appropriate equilibrium range. The Korean won has depreciated approximately 5% against the dollar this year, ranking it among the worst-performing currencies in Asia.

Kim revealed that the NPS is currently in ongoing discussions with financial regulators regarding a new framework designed to enhance the fund's performance and increase stability in the foreign exchange market. He expects these discussions to conclude shortly, and if a consensus is reached, the recommendations will be adopted. He further added that the use of strategic hedging to help stabilize the won is one of the options under consideration.

"We do not fully understand the reasons behind the won's persistent weakness," Kim said. The fund manages assets worth approximately $1 trillion. "We have long recognized the need to respond to foreign exchange fluctuations, and there is now a shared view that some form of action may be necessary."