Woori lets Korean companies conduct China deals in won

Woori Bank, the nation’s second-largest lender, said yesterday it has launched a local currency-based settlement service for companies trading with China.

The service, the first of its kind in the country, allows South Korean firms that trade with China to settle transactions using their own currency, thereby reducing their dependency on the greenback, the bank said.

“Trading companies can diversify their currency payments and cope better with risks from volatility in the foreign exchange market,” said Park Tae-yong, a bank official.

In 2010, Woori Bank became the first local bank to settle trade transactions in the yuan. The lender now accounts for half of Korea’s total yuan settlements. China is Korea’s biggest trading partner. The move is also in line with the government’s effort to internationalize its currency and reduce heavy reliance on the dollar, which will enable the country to cope better with risks from external turbulence, market watchers said.

The bank plans to expand such settlement systems to other Asian countries and Russia.

Yonhap