Korea and Indonesia extend currency swap agreement

Korea and Indonesia have agreed to extend a currency swap deal for another three years as part of efforts to strengthen bilateral financial cooperation, the Korean Ministry of Strategy and Finance said Monday.

The 11 trillion won ($9.6 billion) deal went into effect on Monday and expires in 2020. The ministry said the currency agreement is to promote bilateral trade and bolster financial cooperation between the two countries.

A currency swap is an arrangement between two countries to exchange one currency for another at a specific rate of exchange in a bid to use the powerful foreign currency to soothe volatility in the local currency market.

Korea has swap deals with China, Malaysia, Australia and Indonesia, and has been in talks with the United Arab Emirates to renew their swap arrangement.

A $10 billion currency swap agreement with Japan expired in 2015, 14 years after the two countries first signed the agreement. Talks to reopen the deal have been in a deadlock since January as the Japanese government broke them off for diplomatic reasons. YONHAP