Seoul not seeking limitless currency swap with Washington: official

(ATTN: CORRECTS money unit in 6th para)
SEOUL, Jan. 8 (Yonhap) -- South Korea's finance ministry Thursday dismissed as
"groundless" a local media report that the government is seeking to remove a
ceiling on the maximum amount of dollars it can borrow from the U.S. through a
currency swap deal.
Earlier, a local online news provider reported that the government wants to
replace the existing Seoul-Washington US$30 billion currency swap deal with a new
one with no borrowing ceiling to brace for a possible foreign exchange crisis.
"It is totally groundless," a finance ministry official said on condition of
anonymity. "There is no economic reason to pursue such a deal when financial
markets are gaining stability."
The U.S. has such "limitless" currency swap deals only with the European Union's
central bank, England, Japan and Switzerland.
In October, South Korea and the U.S. signed the currency swap deal with the
contract to be effective until April 30. The swap deal helped ease volatility in
the nation's foreign exchange markets significantly, which were hard hit by
deepening concerns over a dollar shortage at the time.
The nation's central bank recently expanded currency swap lines with Japan and
China to $30 billion, respectively, securing expanded channels to secure dollars
when needed.
The official said that there is no negotiation underway between Seoul and
Washington to remove the current $30 billion ceiling but the government wants the
deadline to be extended.
"We want the deadline to be extended considering the current financial market
conditions and Washington has no reason to reject our wish," the official said.
He didn't elaborate on whether talks are underway for the purpose.
kokobj@yna.co.kr
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