S.Korea-Australia renew $8.1 bn currency swap deal for 5 years

The Bank of Korea (BOK) and the Australian Central Bank have agreed to extend the valid date of the current Australian dollar/won currency swap contract for five years, from Feb. 5, 2023, to Feb. 5, 2028, BOK announced on Monday.

The currency swap, valued at 12 billion Australian dollars (US$8.1 billion), allows for the exchange of currencies in case of emergency, such as a foreign exchange crisis.

The Korea-Australia currency swap was first signed in 2014 and has been extended twice, in 2017 and 2020. This latest extension increases the contract period from three years to five years while maintaining the limit of AU$12 billion and keeping other conditions the same.

An official from the Bank of Korea stated that the two countries believe the currency swap has helped improve trade balance and stabilize the financial market and that the extension was made to keep the arrangement more stable.

Write to Mi-Hyun Jo at mwise@hankyung.com