Korea renews $3.7 billion currency swap line with Malaysia

Korea and Malaysia renewed a 5 trillion won ($3.7 billion) currency swap deal Monday, a move aimed at offering liquidity support to both countries’ financial markets in times of crisis.

Korea and Malaysia renewed a 5 trillion-won ($3.7-billion) currency swap deal Monday, a move aimed at offering liquidity support to both countries’ financial markets in times of crisis.

The swap line has been established in the respective currencies — Korean won and Malaysian ringgit — and will last for three years, according to the Bank of Korea (BOK) and the Finance Ministry. “The swap arrangement is for a period of 3 years and can be extended by mutual agreement between the two central banks,” the BOK said in a statement.

The bilateral currency swap was introduced in February, 2020. It is intended to promote bilateral trade and financial cooperation between the two countries.

Korea is currently bolstering its network of currency swap deals.

Korea and Japan revived a $10 billion currency swap line last December after an eight-year hiatus, helped by a thaw in the two neighboring countries’ relations.

Korea and Australia, for instance, renewed their agreement last February with an increased exchange amount of 9.6 trillion won.

One of the most robust is the agreement with Canada that comes without any ceiling on maturity dates or amounts.

The country's currency arrangement with the U.S. has not been restored after the previous $60 billion swap contract expired in 2021.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]