[Yonhap News Photo]
South Korea is anxiously awaiting the outcome of negotiations with China on extending a currency swap deal amid lingering concerns about trade retaliation caused by a row over the deployment of a US missile shield.
The swap deal worth 56 billion US dollars expires on Tuesday. It has served as a safety net for an emergency because South Korean and Chinese central banks can use each other’s currency to ride out a financial crisis.
Bank of Korea Governor Lee Ju-yeol called for patience as talks were underway. "It would be good to see the conclusion of negotiations before the existing deal expires, but it may not be done so."
Lee has said that negotiations could be held even after expiration. The deal accounts for about 45 percent of South Korea's swap arrangements.
South Korean officials hope an extended swap deal may signal an easing of China's informal trade and economic retaliation that intensified after US troops brought in a Terminal High Altitude Area Defense (THAAD) system to intercept North Korean ballistic missiles in April. Chinese consumers have shunned South Korean products.
"An extended swap deal is a good thing for our economy," Finance Minister Kim Dong-yeon said, adding China is also interested in the deal. South Korea should not worry about any financial turmoil, he said, citing foreign exchange reserves estimated at $380 billion.
reporter
Lim Chang-won
cwlim34@ajunews.com
