A foreign currency swap agreement for up to US$30 billion between Korea and the U.S., together with similar deals with Japan, China and ASEAN countries, gives Korea up to $53.5 billion of liquid foreign currency in an emergency. The government already signed $23.5 billion-currency swap agreements with Japan ($13 billion), China ($4 billion), and Thailand, Indonesia, Malaysia and the Philippines ($6.5 billion altogether). The government plans to expand the size of the agreement with China and Japan in the near future.

Finance Minister Kang Man-soo said, "The currency swap agreement with the U.S. will facilitate our efforts to expand the swap size of the agreement with Japan and China. However, the currency swap with Japan and China is limited because it can only be accessed in a desperate emergency, such as when the country applied or is about to apply for rescue loans to the International Monetary Fund."

The expansion of the deals with Japan and China is not about exchanging dollars but swapping Japanese yen and Chinese yuan. The government also plans to build in the first half of next year a regional fund with Japan, China and ASEAN worth $80 billion to increase access to dollars in times of emergency.

There is another channel to secure dollars -- the Short-Term Liquidity Facility program newly launched by the IMF. The Korean government is not considering applying for the loan at the moment. However, if many advanced and emerging countries decide to apply, the government is likely to reconsider after weighing possible gains and losses and public opinion.