South Korea and Japan agreed to resume a US$10 billion currency swap deal, the finance ministry said Thursday, in the latest sign of a thaw in their economic relations.
The agreement was reached during a meeting between Finance Minister Choo Kyung-ho and his Japanese counterpart, Shunichi Suzuki, in Tokyo, according to the Ministry of Economy and Finance. The ministerial meeting was the first of its kind since 2016.
In 2015, the two neighbors terminated the currency swap amid strained bilateral ties.
The new arrangement, worth US$10 billion, will be based on the U.S. dollar, facilitating the exchange of Korean won for Japan's greenback reserves, and vice versa, the finance ministry said.
The latest currency swap deal will run for three years, it added.
A currency swap is a tool meant to defend against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.
Source: Yonhap News Agency