BOK extends US$20 bln currency swap agreement with BOJ till end-April

(ATTN: ADDS details in para 5, 9-11)
SEOUL, Jan. 19 (Yonhap) -- South Korea's central bank extended a US$20 billion
emergency currency swap agreement with the Japanese central bank by three months
to the end of April to help stabilize the local financial market, the Bank of
Korea (BOK) said Tuesday.
The South Korean won-Japanese yen currency swap line was expanded to $20 billion
from $3 billion in mid-December 2008 as the BOK and the Bank of Japan (BOJ)
agreed to provide emergency currencies at a fixed rate to help stabilize volatile
foreign exchange markets.
The agreement was later extended twice to be effective until Feb. 1.
The latest extension announced on Tuesday will make the facility effective until
April 30 and is "expected to contribute to stabilizing the financial market in
the region," the BOK said in a statement.
The BOK also maintains a $10 billion credit line with Japan as part of a separate
emergency arrangement forged within the Chiang Mai Initiative, a multilateral
currency swap agreement among countries in Asia, the bank said.
The currency swap extension came after the BOK announced the closure of a similar
arrangement with the U.S. Federal Reserve.
The $30 billion currency swap line with the U.S., which was forged in October
2008 and later extended twice, will expire on Feb. 2, the Fed said last December.
The termination came as the local financial market showed strong signs of
normalization after the South Korean won suffered its steepest depreciation in a
decade against the U.S. dollar between late 2008 and early last year.
South Korea's widening current account surplus and foreign-exchange reserves
helped strengthen its currency, which plunged to an 11-year low last March when
the global financial crisis triggered a rush for the safer dollar. The won has
since gained nearly 40 percent against the U.S. dollar.
For 2009, the country is expected to have chalked up a current account surplus,
which measures cross-border trade of goods and services, of $43 billion, a sharp
turnaround from a deficit of $6.4 billion booked the previous year.
Foreign exchange reserves remained near an all-time high of $270 billion at the
end of December, retaining South Korea's status as the world's sixth largest
holder.
pbr@yna.co.kr
(END)