• Economy

Japan, South Korea Revive Currency Swap Pact After 9-year Hiatus

Yomiuri Shimbun file photo
Japan and South Korean flags

The financial authorities of Japan and South Korea signed a new bilateral currency swap agreement on Friday. The finance minister said that, under the agreement, each country will provide funds to the other in the event of a shortage of foreign currencies during a financial crisis.

The agreement took effect on the same day, marking the resumption of the swap arrangement between the two countries for the first time in nearly nine years. The scale of the arrangement is up to $10 billion (about ¥1.5 trillion).

Japan and South Korea first concluded a swap arrangement in 2001. Due to cooling bilateral relations, the agreement expired in February 2015 and was not extended. However the two countries agreed to revive the pact at a finance minister-level meeting in June.