South Korea, Japan extend $10 billion currency swap deal by three years

Key facts

• The currency swap arrangement between South Korea and Japan has been extended by three years.
• The deal is valued at $10 billion and will now expire in November 2029.
• The agreement was reached by Finance Minister Lee Hyoung-il and Japanese counterpart Satsuki Katayama in Bangkok.

South Korea and Japan have agreed to extend their $10 billion currency swap arrangement by another three years, the finance ministry said Thursday. The deal, which was set to expire next month, will now run through November 2029, as the two countries seek to further bolster bilateral economic ties. Finance Minister Lee Hyoung-il reached the agreement with his Japanese counterpart, Satsuki Katayama, during a meeting in Bangkok on the sidelines of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group. The currency swap arrangement, which involves the U.S. dollar, was first signed in December 2023. A currency swap is a tool designed to guard against financial turmoil by allowing a country facing a liquidity crunch to borrow foreign currency in exchange for its own currency. The two countries' currency swap arrangement had previously expanded from $2 billion in 2001 to $70 billion in 2011 but remained dormant from 2015 to 2023 amid strained bilateral relations. During their meeting, the officials concurred that the foreign exchange authorities of both countries currently maintain ample liquidity, describing the currency swap arrangement as a symbol of bilateral cooperation.