S. Korea, Canada agree on currency swap deal

SEOUL, Nov. 16 (Yonhap) -- South Korea and Canada clinched a standing bilateral currency swap deal that will help expand financial exchanges between the two countries, Seoul's central bank said Thursday. Bank of Korea (BOK) Governor Lee Ju-yeol and his Canadian counterpart Stephen S. Poloz signed the agreement at a ceremony at the Bank of Canada's head office in Ottawa, on Wednesday, according to the BOK. The liquidity swap arrangement does not stipulate any ceilings. "The arrangement allows for the provision of liquidity in each jurisdiction to support domestic financial stability should market conditions warrant," the BOK said in a statement. "This effectively enables the Bank of Canada to provide Canadian dollars to the Bank of Korea and to provide liquidity in Korean Won to financial institutions in Canada, should the need arise. Likewise, the Bank of Korea can provide Korean Won to the Bank of Canada, as well as provide liquidity in Canadian dollars to financial institutions in Korea." Market watchers said the deal will add to South Korea's financial stability, as Canada is one of the most credible countries around the globe. Last month, Seoul also agreed to extend a currency swap deal with Beijing. 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. colin@yna.co.kr entropy@yna.co.kr (END)