Korea-US Currency Swap to End This Month... "Foreign Currency Liquidity Conditions Are Favorable"

[Sejong=Asia Economy Reporter Son Seonhee] The Bank of Korea announced on the 16th that the temporary currency swap agreement worth 60 billion dollars with the United States Federal Reserve Board (FRB) is scheduled to end as planned at the end of this month.

The Bank of Korea stated, "The background for the termination of the currency swap agreement is that the domestic and international financial and economic situations have stabilized and moved away from crisis since the agreement was signed." Additionally, it added, "Even if the Korea-US currency swap agreement ends, considering the recent financial and foreign exchange market conditions and the strengthened foreign currency liquidity response capabilities, the impact on the domestic foreign exchange market is expected to be minimal."

As of last month, Korea's foreign exchange reserves stood at 463.9 billion dollars, an increase from the 400.2 billion dollars in foreign exchange reserves at the time the currency swap was signed in March of last year.

The Bank of Korea explained that recently, domestic banks have maintained favorable foreign currency liquidity conditions, and factors such as CDS premiums and foreign currency borrowing spreads remain at low levels, indicating stable foreign currency borrowing conditions.

Accordingly, the funds supplied through the Korea-US currency swap agreement (a total of 19.872 billion dollars) were fully repaid in July of last year, and currently, there is no demand for such funds.

This content was produced with the assistance of AI translation services.