South Korea and Switzerland are entering into a bilateral currency swap agreement, it was announced on Friday. The move is aimed at strengthening buffers against external financial shocks for both countries.
“The swap agreement enables Korean won and Swiss francs to be purchased and repurchased between the two central banks, up to a limit of KRW11.2 trillion, or CHF10 billion [$10.6 billion],” a Swiss National Bank statement saidexternal link.
The agreement will be formally signed in Zurich on February 20, added the statement, which can also be seen on the Bank of Korea websiteexternal link.
The two banks had “enjoyed a constructive exchange of views for many years” and that the bilateral swap agreement would “further strengthen the collaboration between the two institutions”.
South Korea is also expecting good things from the agreement. "The currency swap will help stabilise financial markets and raise global credibility [of South Korea],” finance minister Kim Dong-yeon told reporters after meeting Bank of Korea Governor Lee Ju-yeol in Seoul.