Korea, China Mull Renewal of Currency Swap Deal

Korea and China have agreed to discuss extending their currency swap deal and to boost trade.

Finance Minister Yoo Il-ho, in China for G20 finance ministerial talks, met with China's central bank governor Zhou Xiaochuan on Sunday.

Currency swap deals allow one side to use its respective currency to obtain U.S. dollars from the other at a pre-determined rate in case of an emergency.

Korea and China singed their currency-swap agreement in December 2008, at the onset of the global financial crisis, and have extended it twice so far, allowing Seoul to access up to W64 trillion worth of emergency funds and vice versa (US$1=W1,238).

The deal expires in October next year, but both Seoul and Beijing agreed to start renewal talks early to avoid global financial market jitters.

Yoo and Zhou also agreed to open a won-yuan exchange market within the first half of this year.