South Korea, China extend currency swap deal

한-중 통화스와프 만기 연장 합의 Korea and China have agreed to extend their currency swap deal... that's set to expire next year. This is expected to not only help Korea get better prepared for possible future financial crises... but it's being seen as yet another bilateral move that could also help strengthen its relationship with China. Our Kim Jung Soo has the details. Korea and China agreed on Monday to extend their 2011 currency swap deal that's scheduled to end in October 2017. The current value of the swap deal, which sits at 60 billion dollars, is also subject to a possible expansion. The agreement was finalized by Finance Minister Yoo Il-ho and People's Bank of China Governor Zhou Xiaochuan on the sidelines of the Inter-American Development Bank meeting in the Bahamas. The currency swap deal between the two nations first began in 2009 and was previously extended in 2011. Under the deal, when Korea depletes its foreign exchange reserves, which currently sits at 365 billion U.S. dollars... it can sell a specified quantity of Korean Won to China's central bank. In return, Korea can receive an equal amount of Chinese Renminbi at the prevailing market exchange rate. Later, at a designated time, the payments are returned according to a fixed exchange rate. Experts say these swaps can help strengthen trade relations between the two countries. "Although the value of the swap agreement only amounts to a sixth of Korea's total foreign reserves, I think it is best to understand the extension as a symbol of the strong economic and political alliance between the two nations." The extension of the swap deal is also expected help Korea insure itself against an increasingly unstable global financial market, which faces possible hikes in the value of the U.S. dollar and the Japanese Yen. Kim Jung-Soo, Arirang News. Visit ‘Arirang News’ Official Pages Facebook(NEWS): http://www.facebook.com/newsarirang Homepage: http://www.arirang.com Facebook: http://www.facebook.com/arirangtv Twitter: http://twitter.com/arirangworld Instagram: http://instagram.com/arirangworld

Comments

1. Korean financial committee is also asking Japan to resume the currency swap deal to help themselves at the economic crisis today.  How shameless they are despite all these anti-Japan campaigns they have made.  Japan should never accept it this time or Korea will never learn from the history.
2. Dear Korea. Please do not ask to have currency swap deal to Japan. Japan does not want to have currency swap deal to Korea.