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S. Korea, Japan agree to resume currency swap deal

All Headlines 18:06 August 27, 2016

SEOUL, Aug. 27 (Yonhap) -- South Korea and Japan on Saturday agreed to resume a currency swap deal, which expired last year, as part of their efforts to strengthen bilateral economic cooperation amid a global slowdown and a possible U.S. rate hike.

"The two countries agreed to start negotiations to reopen the currency swap deal," South Korea's Finance Minister Yoo Il-ho said after a finance ministers' meeting with his counterpart Taro Aso in Seoul.

"It represents the strong economic cooperation between Seoul and Tokyo amid rising uncertainties in the global financial market."

Details of the arrangement, including the total amount, will be decided later in the working-level meetings.

In February last year, Seoul and Tokyo agreed to end the US$10 billion bilateral currency swap agreement that had been maintained since 2001.

A currency swap is an arrangement between two countries to exchange one currency for another at a specific rate of exchange in a bid to use the powerful foreign currency to soothe volatility in the currency market.

In the midst of the 2008 financial crisis, South Korea concluded a $30 billion swap deal with the United States, which expired in 2010.

Currently, it has a couple of currency swap arrangements with countries including China, Malaysia and the United Arab Emirates.

Earlier, Seoul and Beijing agreed to extend their currency swap deal, worth 64 trillion won ($57.4 billion), scheduled to expire next year.

brk@yna.co.kr
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