S. Korea extends currency swap line with Japan

SEOUL, March 31 (Yonhap) -- South Korea has agreed to extend its currency swap facility with Japan by six months in an effort to ease financial market jitters, the Bank of Korea (BOK) said Tuesday.

In mid-December, the BOK agreed with the Bank of Japan to expand its existing
won-yen swap facility to $20 billion from $3 billion. The BOK said in a statement
the swap facility will be extended until Oct. 30.
South Korea also has a won-dollar swap arrangement of $10 billion with Japan
which can be tapped in the event of an emergency.
"The BOK believes that this action mitigates adverse influences of the global
financial turmoil on the two sound and well-managed economies and contributes to
securing stability in regional financial markets," the central bank said in a
statement.
The move comes about two months after the U.S. Federal Reserve extended its
currency swap line of US$30 billion with the BOK until Oct. 30. South Korea has
tapped $16 billion from that facility so far.
South Korea's foreign reserves totaled US$201.54 billion at the end of February,
the sixth-largest in the world.
Last year, South Korea's foreign exchange reserves declined for the eighth
straight month before rebounding in December as foreign exchange authorities
tapped part of their dollar holdings to stem the won's sharp fall and ease the
credit crunch.