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ROK expands currency swap with Japan and China |
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President Lee Myung-bak and Japanese Prime Minister Yoshihiko Noda agreed at a summit held on October 19 to expand the currency swap between Korea and Japan to US$70 billion. The previous agreement consisted of a US$10 billion currency swap line agreed under the Chiang Mai Initiative (CMI) and US$3 billion worth of won-to-yen swaps. The Bank of Korea and Bank of Japan are to expand the amount of won-to-yen swaps from the current US$ 3 billion to US$ 30 billion. The two countries will also add US$ 30 billion worth of dollar-local currency swaps while maintaining the US$10 billion CMI currency swap line.
Meanwhile, the currency swap agreement between the Bank of Korea and the People’s Bank of China has been expanded from 38 trillion won (180 billion yuan, equivalent to US$ 26 billion) to 64 trillion won (360 billion yuan, equivalent to US$ 56 billion). The three-year agreement will expire on October 25, 2014. In a statement released on October 26, the Bank of Korea said the agreement would help ease the negative impact of increased global uncertainties, while contributing to the promotion of Korea-China trade.
* Source : 『Monthly Economic Bulletin』 Vol.33 No.11 (Ministry of Strategy and Finance and Korea Development Institute)
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