Korea, Japan agree to extend $10 billion currency swap through 2029

Korea has agreed with Japan to extend their $10 billion currency swap arrangement, set to expire next month, by another three years, the Ministry of Finance and Economy said Thursday, as the two countries seek to further bolster bilateral economic ties.

Finance Minister Lee Hyoung-il reached the agreement with his Japanese counterpart, Satsuki Katayama, during a meeting in Bangkok on the sidelines of the 2026 Annual Meetings of the International Monetary Fund and the World Bank Group.

The two countries' three-year, $10 billion currency swap deal, signed in December 2023, was due to expire in November.

Under the latest agreement, the currency swap arrangement involving the U.S. greenback will run through November 2029, with its size unchanged.

A currency swap is a tool designed to guard against financial turmoil by allowing a country facing a liquidity crunch to borrow foreign currency in exchange for its own currency.

During the meeting, the officials concurred that the foreign exchange authorities of both countries currently maintain ample liquidity and described the currency swap arrangement as a symbol of bilateral cooperation.

The two sides discussed ways to expand bilateral exchanges in the economic and financial sectors, the ministry added.

They also agreed to hold a ministerial meeting in Korea as soon as possible.

Yonhap