USD buffer intact until March as Korea, US extend swap deal to 1 year

2020.07.30 10:47:03 | 2020.07.30 16:00:31

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The central banks of South Korea and the United States Thursday agreed to extend their $60 billion worth currency swap deal for six more months to the end of March next year amid lingering uncertainties from the coronavirus pandemic.

The Bank of Korea and the U.S. Federal Reserve signed into liquidity swap agreement in March to jointly address virus-led disruptions in their markets. With the agreement, the $60 billion swap, due to end on September 30, will stay effective until March 31, 2021, the BOK said in a statement. The yearlong swap applies to nine central banks the Fed entered dollar swap lines in March.

Since the swap, the BOK has been auctioned off the Fed dollars and used $19.8 billion as of May 6. The auction has been suspended after the forex market stabilized.

The BOK said the extension will help keep the forex market stable.

The benchmark Kospi closed Thursday 0.17 percent higher at 2,267.01. The won fell 1.3 to 1,194.4 against the U.S. dollar.

By Lee Ha-yeon

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