More and more experts are calling for the government to conclude currency swap agreements with the United States and Japan, as the won-dollar exchange rate is soaring and South Korea’s foreign exchange reserves are decreasing fast.
At present, South Korea is in currency swap agreement with Canada, China, Switzerland, Indonesia, Australia, the UAE, Malaysia and Turkey. The agreement between South Korea and the United States expired in December last year and that between South Korea and Japan expired in 2015. “The agreement with the United States played an important role during the 2008 global financial crisis and in the pandemic period of 2020,” one of them said.
U.S. Treasury Secretary Janet Yellen is scheduled to visit South Korea on July 19 and a new currency swap agreement between the United States and South Korea may be discussed. At the bilateral summit in May this year, the two adopted a joint statement mentioning the necessity of further cooperation in the forex market.
When it comes to South Korea and Japan, the Yoon Seok-yeol government is expected to seek better relations with the Japanese government by, for example, concluding another currency swap agreement. The Federation of Korean Industries and the Japan Business Federation had a meeting in three years on July 4, calling for freer trade and more economic cooperation between the two states.
