Choo and Yellen agree to cooperate on financial market stability

Finance Minister Choo Kyung-ho, left, and Treasury Secretary Janet Yellen in Seoul in July. It was Yellen's first visit as Treasury Secretary. [YONHAP]

U.S. Treasury Secretary Janet Yellen and Finance Minister Choo Kyung-ho agreed to work together on stabilizing the financial markets.

The two spoke by phone on Friday.

According to a statement released by the Finance Ministry on Saturday, “the two countries are ready to work closely together to implement liquidity facilities when necessary, such as when financial instability is aggravated by a liquidity crunch in major economies, including Korea.”

The Korean and the U.S. governments have been emphasizing “liquidity facilities” as the won has fallen dramatically in value.

It is down about 20 percent this year against the dollar as the U.S. Federal Reserve raises interest rates and signals continued hawkishness.

Korean authorities, including those from the government and the central bank, have repeatedly denied the need for a dollar swap despite the weak currency the possibility of dollar shortages. They have said that the fundamentals are sound and that the time isn't right.

Korea had a currency swap with the United States from November 2008 and February 2010 and another from March 2020 to December 2021.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]