US$30 billion swap line established between Korea and the US.
The US Federal Reserve and the Bank of Korea (BOK) agreed to establish a US$30 billion temporary reciprocal currency arrangement (swap line). As a result, South Korea will be able to secure supplies of up to US$30 billion from the US in exchange for deposits in won. This reciprocal currency arrangement has been authorized through April 30, 2009.
The latest currency swap agreements, which the Federal Reserve concluded also with Brazil, Mexico and Singapore, were aimed at addressing the global financial market's liquidity problems and helping those countries with solid economic fundamentals overcome difficulties in securing dollar liquidity. The Federal Reserve previously established swap lines with ten other central banks of Australia, Canada, Denmark, the EU, Japan, New Zealand, Norway, Sweden, Switzerland, and the UK.
The Korean government has strongly called for the need to expand swap lines to include emerging economies and welcomed this agreement between the Bank of Korea and the Federal Reserve. The swap line with the US is expected to greatly contribute to easing the anxiety stemming from the global credit crisis and stabilizing the Korean financial market.
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|Title Annotation:||Economic News Briefing|
|Publication:||Economic Bulletin (Korea)|
|Date:||Nov 1, 2008|
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