S.Korea, Australia renew currency swap deal for 3 years

Central banks of South Korea and Australia agreed to renew their bilateral currency swap deal for three more years and expand the swap size by 20 percent, the Bank of Korea (BOK) said Thursday.

The BOK and the Reserve Bank of Australia agreed to extend their existing currency swap deal, in which the South Korean currency is swapped for the Australian dollar, for three more years through Feb. 5, 2023.

The size of the deal will be increased to 12 billion Australian dollars, or 9.6 trillion won (about 8.1 billion U.S. dollars), from 10 billion Australian dollars, or 9 trillion won (7.6 billion U.S. dollars).

The two countries initially signed the swap deal in 2014 and have since extended it every three years.

The BOK said in a statement that the agreement is designed to promote bilateral trade for the economic development of the two countries, to enhance financial stability and for other, mutually agreed, purposes.

It noted that the agreement will ensure that trade between the two countries can continue to be settled in local currency even in times of financial stress.