U.S. Extends Currency-Swap Agreement with Korea

  • By Kim Eun-jung

    July 31, 2020 13:44

    The U.S. Federal Reserve on Wednesday extended a six-month currency-swap agreement with nine central banks, including the Bank of Korea, for another half-year.

    The deal allows them to raise dollars more easily during a crisis as the coronavirus epidemic prompted countries around the world to hoard the greenback. Financial markets stabilized quickly when the deal was first signed in March and the dollars has returned to levels seen before the epidemic.

    The agreement was set to expire on Sept. 30 but has now been extended two months before its expiration to preempt market jitters. It is now valid until the end of March 2021.

    "The global and domestic markets are showing signs of stabilizing, but uncertainties remain," the BOK said.

    Korea has a $60 billion currency-swap deal with the U.S. Until now, the BOK supplied about one-third of that amount or $19.9 billion into the domestic forex market.

    News of the extension prompted the won to rise to W1,187.9 per dollar in early morning trading on Thursday, the strongest in five months. But the dollar recovered to close at W1,194.4.

    Meanwhile, the Korea Composite Stock Price Index closed up 0.17 percent on Thursday at 2,267.01 points, while the junior Kosdaq closed up 0.69 percent at 814.19.

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