South Korea and China extend currency swap deal for another 3 years

The deal puts in place a system to tackle a shortfall of cash in case of any emergency and adds to existing financial safety nets.

On Friday, South Korea stated it has agreed to extend a currency swap deal, which will add to existing financial safety nets, with China.

The $56 billion currency swap will be extended for a period of 3 years, said the Bank of Korea, South Korea’s central bank, and South Korea’s finance ministry, in a statement.

The development comes in the wake of Beijing unofficially restricting trade and tourism with South Korea as a retaliation Seoul’s decision to deploy U.S. THAAD anti-missile defense system to protect itself against North Korea’s nuclear missiles.

This swap ensures both central banks have access to large amounts of each other’s currency in the need for any eventuality.

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