KDB Vice President Cho Seung-hyun and Hu Hao, Vice President of ICBC. [photo provided by KDB]
South Korea’s state-run Korea Development Bank (KDB) on Wednesday signed a $200 million currency swap deal with Industrial Commercial Bank of China (ICBC) in a move to strengthen its buffer against increasing volatility in the financial market.
According to KDB, the one-year bilateral currency swap agreement that can be renewed up to two times will be in the form of a committed credit line, which enables KDB to extend loans of up to 1.3 billion yuan in China and ICBC up to 220 billion won in Korea based on current exchange rate.
The latest agreement comes after KDB Chairman Lee Dong-gull signed a business partnership deal with ICBC in December last year, when he accompanied Korean President Moon Jae-in during his state visit to Beijing as part of business delegation.
KDB said that the won-yuan deal is a private bilateral currency swap agreement that will serve as a safety net to prepare for increasing volatility in the financial market as it will be allowed fund supply in times of emergency.
ICBC, China’s state-owned financial institution, has ranked as the No. 1 bank in U.K.-based financial and economic journal The Banker’s Top 1,000 World Banks for five consecutive years from 2013.
Meanwhile, KDB also signed a memorandum of understanding with China’s largest venture capital Shenzhen Capital Group and Fortune Link earlier this month in Shenzhen, China, to boost bilateral exchange in venture investment and expand overseas advancement of venture companies. Shenzhen Capital, China’s first venture capital established by Shenzhen Government, manages the country’s largest 44 trillion won ($40.8 billion) worth of venture funds.
By Lee Seung-yoon and Lee Eun-joo
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