South Korea's central bank said Wednesday it has agreed with its Malaysian counterpart to extend their bilateral currency swap line, a move that could further strengthen bilateral financial cooperation.
Under the deal that will last until January 2020, the two countries can exchange 5 trillion won ($4.2 billion) for 15 billion ringgit ($3.3 billion) or vice versa, which could also be used to settle payments linked to their bilateral trade, the Bank of Korea said in a statement.
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(Yonhap) |
"This arrangement is intended to promote greater use of local currencies in settlement of trade. This will further strengthen the financial cooperation between the two countries," the BOK said.
The swap arrangement can be extended by mutual agreement between the two central banks, the BOK said.
The two sides established a won-ringgit currency swap deal in October 2013 as part of efforts to bolster their financial ties.
South Korea also has swap deals with China, Australia and Indonesia. Seoul has been in talks with the United Arab Emirates to renew their swap arrangement.
A currency swap line is a tool to defend against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.
South Korea has been seeking to use currency swap deals with other countries to settle payments for trade in a bid to reduce its dependency on the US dollar. (Yonhap)
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