SEOUL – The formation of a currency swap deal with the United States is unlikely to be discussed during President Joe Biden’s visit this week as a way to tackle the continuing fall of the WAN, a senior South Korean official said Wednesday.
Deputy National Security Adviser Kim Tae-hyeo told reporters that this is not the right time to discuss that a currency exchange is usually discussed during a severe economic crisis.
“The Federal Reserve usually considers a currency exchange agreement in times of severe economic crisis, but now is not the time and our economic fundamentals are strong,” Kim told reporters while explaining Biden’s planned visit.
Biden is expected to arrive in South Korea on Friday and hold talks with South Korean President Eun Sook-eol.
There is some speculation that South Korea may try to forge a currency swap deal with the Federal Reserve to support the victory, which has weakened 6% so far this year against the dollar, which fell to 8.6% last year.
South Korea’s central bank signed a $ 60 billion currency exchange agreement with the US Federal Reserve in March 2020 as an urgent step to stabilize markets, and both sides allowed the agreement to expire late last year.
Under the bilateral currency exchange, South Korea will be able to borrow a certain amount of US dollars for a pre-determined period and at a pre-determined rate in exchange for overcoming the liquidity problem of the dollar.
(Reporting by Hyunhi Shin; Writing by Chunsik Yu; Editing by Christian Schmolinger)