Currency deal expected to bring positive changeKorea’s top economic policy maker said Thursday that the recent extension of the currency swap deal with China will help improve two-way relations, which have been in a deadlock following Seoul’s decision to deploy a U.S.-led missile defense system.
“I expect the renewed currency swap deal to bring about some positive change [in China’s stance],” Finance Minister Kim Dong-yeon said in a parliamentary session. “But there is no need to elaborate on this issue.”
Last week, Seoul and Beijing agreed to extend their swap arrangement, worth 64 trillion won ($55 billion), for three years amid escalating Seoul-Beijing tensions over the military issue. A currency swap is a tool for defending against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.
China - Korea’s largest trading partner - has banned group tour packages since March and pushed forward unofficial measures against Korean goods and services, as part of its retaliation against the deployment of the Terminal High Altitude Area Defense (Thaad) system.
As a result, the number of Chinese travelers to Korea plunged 69.3 percent in July from a year earlier, while Hyundai Motor and Kia Motors, the country’s leading carmakers, saw their sales lose ground sharply in the world’s biggest car market