Korea, Turkey extend currency swap, with 3-year deal for $2 bn

The Bank of Korea announced on Monday that it has renewed its currency swap agreement with the Central Bank of Turkey.

The agreement covers $2 billion, equivalent to about 2.3 trillion won or 56 billion Turkish liras, and has a term of three years. The agreement can be extended upon maturity by mutual consent. A currency swap is an agreement that allows a country to borrow the other country’s currency or dollars by pledging its own currency to the other country in times of emergency, such as a currency crisis.

“The purpose of the swap is to enhance trade and financial cooperation between the two countries,” a BOK official said, adding that the renewal of the swap will contribute to mutual economic development and strengthen bilateral cooperation.