South Korea agreed to extend the existing currency swap line with Japan by additional three months to stabilize local financial markets, the central bank said Friday.
According to the Bank of Korea (BOK), the latest agreement enabled the swap facility to be extended until Feb. 1, 2010.
Last December the BOK reached an agreement with the Bank of Japan to increase its existing won-yen swap line to 20 billion U.S. dollars from 3 billion U.S. dollars.
Later in March, the two sides agreed to extend the swap facility by six months until Oct. 30.
In addition to the won-yen swap line, South Korea also has a won-dollar swap arrangement worth 10 billion U.S. dollars with Japan.
"We believe this action will contribute to securing stability in regional financial markets," the BOK said in a statement.
South Korea's central bank had earlier achieved extending its currency swap line with the U.S. Federal Reserve, securing 30 billion-U.S. dollar swap line until Feb. 1.
South Korea's foreign reserves, the world's sixth-largest, totaled 254.25 billion U.S. dollars as of end-September./.