Korea, Canada sign first standing currency swap

Korea, Canada sign first standing currency swap


A bilateral currency swap deal is signed by
South Korea and Canada.. Other than allowing both sides to provide
liquidity in times of need, there is no limit on the amount of currency and no expiration
date. Kim Hyesung provides a closer look into the
unique arrangement designed to help them ride out any future financial emergencies more
smoothly. A standing bilateral currency swap deal between
South Korea and Canada that does not stipulate ceilings or a maturity date has been reached. The Bank of Korea said Thursday that the deal,
which takes effect immediately, will enable the Bank of Canada to provide Canadian dollars
to South Korean financial institutions and the South Korean central bank to provide Korean
won to financial institutions in Canada. Finance Minister Kim Dong-yeon said the liquidity
swap deal means South Korea has secured a powerful “safety net” that can be used in
case of a crisis. The Canadian dollar is the sixth most traded
currency in the world. The deal is expected to improve South Korea’s
overseas credibility and help both countries strengthen their respective buffers against
any external shocks. South Korea has signed a number of currency
swap deals since the global financial crisis with nations such as Indonesia, Australia
and Malaysia. Seoul also agreed to extend a 56 billion U.S.
dollar currency swap deal with Beijing last month. Kim Hyesung, Arirang News.

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