Presidential Office: "Currency Swap Included in Liquidity Supply Mechanism... Under Review by Korea-US NSC"

Included in NSC Review: US Inflation Reduction Act and Extended Deterrence Against North Korea

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] On the 22nd (local time), the Presidential Office announced that President Yoon Seok-yeol and U.S. President Joe Biden, who met in New York, instructed their respective NSCs (South Korea's National Security Council and the U.S. National Security Council) to closely review the Korea-U.S. currency swap issue.

A senior official from the Presidential Office explained during a press briefing at the local press center around midnight that the NSC review instructions included the U.S. Inflation Reduction Act (IRA), extended deterrence against North Korea, as well as the Korea-U.S. currency swap issue.

Earlier, the Presidential Office conveyed through a press release that as a result of three meetings between the two leaders held from the 19th to the 21st in London and New York, both countries agreed to closely cooperate to implement liquidity facilities for financial stability when necessary.

Regarding this, Chief Economic Secretary Choi Sang-mok said at the briefing, "There are various types of liquidity facilities," adding, "I think these will be specified through consultations between the financial authorities of both countries, and currency swaps are included among the liquidity facilities subject to consultation between the authorities."

Chief Secretary Choi explained that the expression regarding liquidity facilities has progressed compared to the Korea-U.S. summit in May and the Korea-U.S. finance ministers' meeting in July. During the Korea-U.S. summit, the two leaders agreed to "closely cooperate on foreign exchange market trends for sustainable growth and financial stability."

The current agreement has been specified as the "implementation of liquidity facilities for financial stability," which is more concrete than the previous agreement.

He also noted that although the term liquidity facilities was mentioned at the finance ministers' meeting, the willingness to cooperate was not clearly expressed at that time, stating, "This time, the clear expression of intergovernmental cooperation intention is meaningful."