Korea and Japan have agreed to expand a currency swap agreement from the current US$13 billion to $30 billion, officials here said Thursday. Seoul is also in the final stage of talks with Beijing on boosting their currency swap deal from $4 billion to $30 billion.

The agreements will be formally announced at a three-way summit in Fukuoka, Japan on Saturday. A currency swap deal is an agreement between two countries to exchange a given amount of one currency for another, boosting both nations' nominal foreign reserves. Korea will be able to secure further dollars through China, which has the world's largest foreign reserves of $1.76 trillion, and Japan, which has the second largest with $975.5 billion. As of the end of November, Korea's foreign currency reserves stood at $200.5 billion.

The deals with Japan and China boost that figure to $290 billion, with a still-unused portion of $23 billion from a currency swap deal with the U.S. and $6.5 billion with the ASEAN. The improvement in dollar liquidity is expected to benefit the won and stock prices, both of which have been undervalued.