October 11, 2017 09:28
Korea and China are stuck in negotiations to extend a bilateral currency swap deal that expired Tuesday.
The deal, which allows one side to use its currency to buy U.S. dollars from the other at a pre-determined rate in case of an emergency, was first signed in 2009 and has been extended twice so far, allowing Seoul to access up to W63 trillion worth of Chinese emergency funds and vice versa (US$1=W1,137).
Bank of Korea Governor Lee Ju-yeol said, "Nothing has been completed yet and a meeting is scheduled for today as well. So long as negotiations continue, the expiry date is not necessarily important. It would of course be good if everything was complete before the deal expires, but that has not happened."
Prospects looked bright until late last year but turned murky when Seoul agreed to let the U.S. station a Terminal High-Altitude Area Defense battery here earlier this year. China fiercely opposes the THAAD deployment because it believes that its powerful radar can be used to spy on its military activities.
Some government sources say working-level officials have agreed to extend the deal but the Chinese leadership has yet to give it the final nod.
This has raised speculation that the deal could get the green light once China completes the 19th Communist Party Congress that starts on Oct. 18.
Finance Minister Kim Dong-yeon said, "The extension of the swap is beneficial for our economy. China, too, is deeply interested, so I ask that you wait patiently until the final announcement."
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