(Photo: Yonhap News)
South Korea and Switzerland have agreed to extend their bilateral currency swap deal.
The Bank of Korea said the 11.2 trillion-won, or 10.1 billion dollar, currency swap, which had been scheduled to expire Monday, will be kept in place for another 5 years.
The swap deal enables Korean won and Swiss francs to be purchased and repurchased between the countries' two central banks under the stated limit, and will "enhance bilateral cooperation and to facilitate the functioning of financial markets of the two countries" according the BOK said.
A currency swap is a tool for defending against financial turmoil by allowing a country suffering a liquidity crunch to borrow money from others with its own currency.
Market watchers said the agreement will add to South Korea's financial stability, as Switzerland is one of the most credible countries around the globe.
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