Bank of Korea, US Fed Agree on $60 Billion Currency Swap (Update)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The Bank of Korea announced on the 19th that it has signed a bilateral currency swap agreement worth 60 billion dollars with the United States Federal Reserve (Fed).

This currency swap agreement was made to resolve the recent sharp deterioration in the global dollar funding market liquidity.

The currency swap agreement period is at least six months.

The Bank of Korea stated, "We plan to immediately supply the US dollars procured through the currency swap, which will contribute to stabilizing the domestic foreign exchange market where the exchange rate is rapidly rising due to recent dollar supply and demand imbalances."

It added, "The Bank of Korea will continue efforts to stabilize the financial market through cooperation with major central banks."

Meanwhile, the Fed announced that it will simultaneously sign swap agreements not only with Korea but also with the central banks of Denmark, Norway, Sweden, Australia, New Zealand, Brazil, Mexico, and the Monetary Authority of Singapore.