S. Korea, Japan to discuss expansion of currency swap line

SEOUL, Oct. 18 (Yonhap) -- Leaders of South Korea and Japan plan to discuss the expansion of the won-yen swap line in an effort to stabilize the two financial markets, the Seoul government said Tuesday.

South Korean President Lee Myung-bak was to hold a summit with Japanese Prime Minister Yoshihiko Noda on Wednesday to discuss pending bilateral issues and the expansion of the won-yen swap facility worth US$3 billion is on the agenda, according to the finance ministry.

"At the Wednesday summit, the two leaders will discuss the expansion of the currency swap line," said an official at the finance ministry.

"But details over how much or by when the swap facility will be expanded have yet to be decided."

In the height of the global financial crisis, the Bank of Korea agreed with the Bank of Japan to expand its won-yen swap facility to $20 billion from $3 billion.

Last year, the two central banks closed the extra currency swap line forged at the height of the global financial turmoil as the global financial markets showed signs of stabilizing. The current won-yen swap facility is set to expire July 3, 2013.

South Korea also has a won-dollar swap arrangement of $10 billion with Japan, which can be tapped in the event of an emergency.