ID :
35315
Sat, 12/13/2008 - 06:32
Auther :
Shortlink :
http://m.oananews.org//node/35315
The shortlink copeid
S. Korea expands currency swap with China to US$30 bln By Kim Soo-yeon
SEOUL, Dec. 12 (Yonhap) -- South Korea has agreed to expand a currency swap agreement with China to US$30 billion in a bid to help short-term dollar liquidity conditions in the financial system, Seoul's central bank said Friday.
The Bank of Korea (BOK) was also expected to announce the expansion of a currency
swap facility with the Bank of Japan (BOJ) later in the day. Currently, the BOK
has a $4 billion currency swap line the People's Bank of China and a $13 billion
facility with the BOJ.
"The expanded facility will remain effective for three years and could be
extended by an agreement between the two sides," the BOK said in a statement.
Market watchers said the move will have a positive effect on the financial market.
"South Korea's expansion of currency swap agreements with China and Japan will
help ease some jitters in the financial market. But as the news has been already
factored into the market, the impact of the won's gain would be limited," said
Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
In late October, the BOK announced a $30 billion currency swap agreement with the
U.S. Federal Reserve and on Dec. 2, the BOK tapped $4 billion out of the swap
line for the first time.
The latest move comes amid a dollar shortage in the local financial market, which
has been impacted by the collapse of U.S. investment bank Lehman Brothers
Holdings Inc. The local currency has fallen about 32 percent against the U.S.
dollar so far this year.
Concerns have been mounting over South Korea's foreign exchange reserves, the
world's sixth-largest, as they declined for the eighth straight month in November
due to liquidity injections designed to ease an ongoing credit crunch and
financial jitters.
The foreign reserves totaled $200.51 billion as of end-November, down $11.74
billion from a month ago. South Korea has pumped $31.9 billion into the local
financial system over the past two months from a planned $55 billion to ease the
frozen credit market.
sooyeon@yna.co.kr
(END)
The Bank of Korea (BOK) was also expected to announce the expansion of a currency
swap facility with the Bank of Japan (BOJ) later in the day. Currently, the BOK
has a $4 billion currency swap line the People's Bank of China and a $13 billion
facility with the BOJ.
"The expanded facility will remain effective for three years and could be
extended by an agreement between the two sides," the BOK said in a statement.
Market watchers said the move will have a positive effect on the financial market.
"South Korea's expansion of currency swap agreements with China and Japan will
help ease some jitters in the financial market. But as the news has been already
factored into the market, the impact of the won's gain would be limited," said
Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
In late October, the BOK announced a $30 billion currency swap agreement with the
U.S. Federal Reserve and on Dec. 2, the BOK tapped $4 billion out of the swap
line for the first time.
The latest move comes amid a dollar shortage in the local financial market, which
has been impacted by the collapse of U.S. investment bank Lehman Brothers
Holdings Inc. The local currency has fallen about 32 percent against the U.S.
dollar so far this year.
Concerns have been mounting over South Korea's foreign exchange reserves, the
world's sixth-largest, as they declined for the eighth straight month in November
due to liquidity injections designed to ease an ongoing credit crunch and
financial jitters.
The foreign reserves totaled $200.51 billion as of end-November, down $11.74
billion from a month ago. South Korea has pumped $31.9 billion into the local
financial system over the past two months from a planned $55 billion to ease the
frozen credit market.
sooyeon@yna.co.kr
(END)
