Special Report: Global Financial Crisis
SEOUL, Feb. 23 (Xinhua) -- South Korea and Japan will
be likely to agree on currency swap extension, South Korea's Yonhap News Agency
reported on Monday.
According to Yonhap, South Korean Deputy Finance
Minister Shin Je-yoon said South Korea's currency swap arrangement with Japan is
expected to be extended automatically if contingency occurs.
"Of course, Japan's central bank is now holding the
key to the issue, but we believe things will be done in a good direction," the
official was quoted as saying, without giving details on its duration and size.
Shin is currently accompanying South Korean Finance
Minister Yoon Jeung-hyun for the ASEAN Plus Three special meeting held in
During the meeting, finance chiefs of 10 ASEAN (the
Association of Southeast Asian Nations) member countries plus South Korea, Japan
and China have discussed on cooperation and countermeasures against the regional
South Korea and Japan currently have a won-yen
currency swap pipeline set at 20 billion U.S. dollars, which is to expire in
April, while holding a three-year-long swap deal worth 25.1 billion U.S. dollars
On Sunday, the finance chiefs agreed to increase the
size of their joint currency pool to 120 billion U.S. dollars from an
earlier-proposed 80 billion U.S. dollars.
The expansion was expected to help South Korea by
supplying it with an additional channel for foreign currency.
As rumors are rampant that foreign financial firms
are to draw a large amount of capital out of Seoul, the South Korean currency
won plunged to a three-month low against the U.S. dollar on Friday at 1,506 won
against one U.S dollar.
Vice Finance Minister Hur Kyung-wook said here on
Monday that Asian countries need to expand currency swap lines in a bid to
better cope with a regional financial crisis.
"Expanded Currency swaps in Asia will help us focus
more on stimulating our economy without worrying over a foreign currency
shortage. Eventually, that will also be in the interest of advanced countries,"