S. Korea, Australia extend currency swap deal to boost trade, stabilize markets

한-호주 통화스왑 2배 확대 연장.. 무역활성화, 금융시장 안정 목표

South Korea and Australia’s central banks renewed their currency swap agreement.
Based on the Australian dollar — the world’s fifth most-traded currency… it doubles the amount from the previous arrangement.
Song Ji-sun introduces to us the new deal… expected to stabilize the markets in times of crisis… and boost trade between the two countries.
The Bank of Korea and the Reserve Bank of Australia on Wednesday announced that they will extend their currency swap deal by another three years for double the amount allowed for in the previous agreement signed in 2014.
The new deal allows for the exchange of up to 9 trillion won, or 10-billion Australian dollars, which is about 7-point-7 billion U.S. dollars.
The two central banks noted the swap deal was sealed to facilitate trade, boost economic development and help stabilize financial markets.
Currency swap deals help countries hedge risk against financial turmoil… by allowing one country to borrow money from another using its own local currency, thus reducing its exposure to radical exchange rate fluctuations.

Australia is South Korea’s eighth-largest trading partner… and its dollar is the fifth most-traded currency in the world.
Australia’s AAA rating from Standard & Poor’s is a notch higher than Korea’s AA rating.

The BOK previously extended its currency swap deal with Malaysia just two weeks ago… and is seeking to renew its swap arrangements with the United Arab Emirates and Indonesia.
Song Ji-sun, Arirang News.

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