Japan, S. Korea Agree To Expand Currency Swap Arrangement
Japan and Korea on Wednesday agreed to raise the size of the bilateral yen-won swap arrangement in order to stabilize regional financial markets through supplying short-term liquidity.
The existing yen-won swap arrangement worth $3 billion will be raised to $30 billion, the Bank of Japan and the Bank of Korea said in a joint statement. This increase will be effective until the end of October 2012.
They also opened a new $30 billion U.S. dollar-local currency arrangement. Japan's Ministry of Finance in a separate statement said the agreement will lift their bilateral total swap arrangements to $70 billion from $13 billion.