SKorea, China agree to expand currency swap deal

AP News
Posted: Oct 26, 2011 7:34 AM
SKorea, China agree to expand currency swap deal

South Korea's central bank says it has agreed with its Chinese counterpart to expand their currency swap deal as a backstop against global economic turmoil.

The Bank of Korea said Wednesday that its won-yuan swap agreements with the People's Bank of China will double from 180 billion yuan to 360 billion yuan for the next three years.

The South Korean central bank's announcement came as Chinese Vice Premier Le Keqiang met with South Korea's President Lee Myung-bak during a two-day trip to Seoul.

South Korea and Japan agreed last week to expand the size of their countries' currency swap deal from $13 billion to $70 billion.

Swaps allow one central bank to borrow a currency from another, offering an equivalent amount of its own as collateral.