Another Currency Swap
Korea and Malaysia have signed a won-ringgit currency swap deal worth US$4.7 billion.
According to the Bank of Korea on October 20, the three-year currency swap deal enables the two countries to exchange 5 trillion won for 15 billion ringgit, or vice versa, and settle payments for their bilateral trade.
Korea’s central bank Governor Kim Choong-soo signed the deal while he was in Malaysia to attend an international forum.
Korea imported goods worth US$9.8 billion from Malaysia last year, which accounted for around 2 percent of the country’s total imports.
The deal can be extended upon agreement by both parties.
The won-ringgit currency swap deal came a few days after Korea made similar swap deals with Indonesia (US$10 billion) and the United Arab Emirates (US$5.40 Billion).
The Korean government has been seeking to utilize currency swap deals with foreign countries to settle payments for trades as an effort to reduce its dependency on the US dollar.