S. Korea, U.S. extend currency swap line

By Park Bo-ram
SEOUL, June 26 (Yonhap) -- South Korea's central bank said Friday it has extended
its currency swap facility with the U.S. Federal Reserve for an additional three
months to stabilize the local currency market.

The Bank of Korea (BOK) opened a US$30 billion, six-month swap agreement with the
U.S. Fed on Oct. 30, 2008, in the heat of global financial turmoil to help
bolster the Korean won. The accord was later extended for six months.
"With the latest agreement, the swap line will be effective through Feb. 1, 2010,
helping contribute to the stability of the local foreign exchange market," the
BOK said in a statement.
South Korea is currently using $10 billion from the facility that provides dollar
loans to local banks after tapping $16.35 billion in January.
"The latest extension is aimed at securing emergency credit that can be tapped at
any time in case problems arise," Yang Suk-joon, a central bank official, said.
Market watchers said the extension of the South Korea-U.S. currency swap line
will have a limited impact on the currency market since local banks' dollar
liquidity conditions have improved greatly.
As of Wednesday, the South Korean currency traded at 1,288.80 won to the dollar,
up 22 percent from March, when it plummeted to an 11-year low against the
greenback.
pbr@yna.co.kr
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