The Ministry of Strategy & Finance of South Korea announced on January 17 that the currency swap agreement between South Korea and China might be expired without extension in October this year although the two countries agreed with each other about its extension in March last year. This has to do with the ongoing political uncertainties and strife between the two countries surrounding THAAD deployment in South Korea.
“The currency swap agreement between South Korea and China is worth US$56 billion, approximately half of the total size of South Korea’s currency swap deals,” the ministry explained, adding, “In view of the high ratio, we believe that its extension is necessary although the non-extension is unlikely to restrict the financial liquidity of South Korea in the short term.”
In the meantime, the ministry declared that it would not ask for the resumption of its currency swap agreement with Japan although negotiations for it were recently came to a halt. “The halted talks do not affect conditions on the part of ourselves to a significant extent and the talks will be resumed only when Japan is open to negotiations first.”