S. Korea, Japan to discuss currency swap during upcoming ministerial talks

Diplomacy 15:49 June 08, 2023

SEOUL, June 8 (Yonhap) -- South Korea will discuss a currency swap deal with Japan during an upcoming financial ministers' meeting later this month, Seoul's financial chief said Thursday.

Seoul's Finance Minister Choo Kyung-ho and his Japanese counterpart, Shunichi Suzuki, are scheduled to meet in Tokyo on June 29-30 to discuss the current economic situation and ways to cooperate in the economic and financial fields amid a recent thaw in bilateral relations.

"The currency swap deal between South Korea and Japan expired in 2015, and I will discuss the matter (with my Japanese counterpart). I will do my best to draw meaningful results," Minister Choo Kyung-ho said in a forum organized by the Kwanhun Club, an association of senior South Korean journalists.

Seoul and Tokyo had talks to revive the US$10 billion currency swap deal, but they have been suspended since 2019 amid a feud over diplomatic and historical issues.

A currency swap is a tool meant to defend against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.

The upcoming finance ministers' meeting would mark the first talks of its kind since 2016.

Last month, the two ministers met on the sidelines of the 56th Annual Meeting of the Board of Governors of the Asian Development Bank to resume their long-stalled finance ministers' meeting "at an appropriate time."

The bilateral relationship soured in 2019, as Japan imposed export curbs against South Korea in retaliation against the 2018 South Korean Supreme Court rulings ordering Japanese firms to compensate South Korean victims of forced labor during Japan's 1910-45 colonial rule of the Korean Peninsula.

Relations, however, have improved after President Yoon Suk Yeol in March offered to resolve the forced labor issue by compensating victims on South Korea's own without asking for contributions from Japan.