South Korea and China’s $56 billion currency swap deal expired after midnight of Tuesday as the two countries failed to agree on the extension of the deal amid the ongoing diplomatic spat between the two countries over Seoul’s deployment of an U.S. antimissile system in Korea.
According to Bank of Korea and other government officials on Wednesday, Korea and China failed to reach an agreement to extend their currency swap deal, but the two will seek to continue to negotiate on the resumption of the deal.
Worries have loomed before the meeting that the two neighboring countries would not be able to renew the deal amid the ongoing diplomatic row over Korea’s host of Terminal High Altitude Area Defense (THAAD) system that China is strongly opposes citing security reasons.
After the meeting ended, Kim Dong-yeon, deputy prime minister and finance minister, told reporters that the two countries are still in talks. “China is still interested in extending the deal” as it is seeking to make Chinese yuan as key international currency, he added.
“It would have been better if the agreement had been reached before the deal expired, but expiration isn’t all that important,” said Bank of Korea Governor Lee Ju-yeol, signaling that the two countries could carry on with the negotiations even after the expiration of the deal.
Korea and China first signed a currency swap worth $26 billion in 2009 to cushion the shocks from the global financial crisis in 2008. The deal was expanded to $56 billion in 2011 and has since been extended twice.
By Kim Gyu-sik
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