Seoul, Dec 16 : South Korea’s $60 billion currency swap contract with the US will expire as scheduled on December 31 as financial and economic situations at home and abroad remain stable, Seoul’s central bank said on Thursday.
The Bank of Korea (BOK) and the US Federal Reserve signed the currency swap contract in March 2020 to ease financial anxiety caused by the coronavirus pandemic and had since extended the deal three times, reports Yonhap News Agency.
“The temporary currency swap will expire as scheduled,” the BOK said in a statement.
“Since the currency swap deal was signed, domestic and global financial and economic situations have come out of a crisis and remain stable.”
The BOK said that the expiration of the currency swap deal will not have much impact on Seoul’s foreign currency market given the improved liquidity and other financial conditions, such as a sufficient amount of foreign reserves.The central bank had earlier said that its foreign reserves came to $463.91 billion as of end-November.The currency swap deal marked the second of its kind signed with the US after a won-dollar swap line signed in October 2008 at the height of the global financial crisis.Except the deal with the US, South Korea has bilateral currency swap arrangements with eight countries, including Australia, Canada and China.ksk/
S.Korea’s $60bn currency swap deal with US to expire on Dec 31
According to the BOK, Seoul’s currency market will be unaffected by the end of the currency swap agreement due to the better liquidity and other financial conditions such as sufficient foreign reserves. The central bank stated earlier that it had foreign reserves of $463.91 trillion as of November 31st.
After a won dollar swap agreement in October 2008, at the peak of global financial crises, the currency swap deal was the second.
Apart from the US deal, South Korea also has bilateral currency swap agreements with eight other countries including Australia, Canada, and China.
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