[KITA News] Resumption of currency swap considered symbolizes improvement in relations

                                                     

Resumption of currency swap considered symbolizes improvement in relations

“Resumption of currency swap considered

at the Korea-Japan Finance Ministers’ Meeting…

Symbolizes improvement in relations”

 

“Resumption of currency swap considered at the Korea-Japan Finance Ministers’ Meeting…Symbolizes improvement in relations”

 

On June 15, the Japanese press, including the Yomiuri Shimbun, reported that the Korean and Japanese governments were reviewing taking the direction of re-establishing the currency swap agreement.

 

The Yoimuiri quoted a member of the Japanese government, saying that at the Korea-Japan Finance Ministers’ Meeting to be held in Tokyo on June 29-30, re-establishing the currency swap would be treated as a major agenda.

 

A currency swap is a contract in which a country can entrust its currency to another country, and receive that country’s currency or dollar in return, usually during emergency periods such as foreign currency crisis.

 

The Yomiuri explained that “Both Korea and Japan have a foreign currency reserve, and thus the need for such an agreement is not great, but as a symbol of improving relations we are adjusting our direction to make another agreement.”

 

An official of Japan’s Prime Minister’s Office told the Asahi Shimbun, that “Rather than simply re-establishing the swap agreement, we want to transform it into one that can contribute to the entire East Asia.”

 

The Korea-Japan currency swap began in 2001, but with deterioration in bilateral relations and with the duration of the contract coming to an end, it terminated in 2015.

 

Afterwards, the two countries engaged in discussions to resume the currency swap, but this was suspended each time due to the issue of the installation of the Statue of Peace.

 

However, with the inauguration of the Yoon Suk Yeol government, Korea-Japan relations improved, and the Korea-Japan Finance Ministers’ meeting was held recently in seven years, at which the currency swap was discussed.

 

On June 8, at the Debate hosted by the Kwanhun Club, Choo Kyung-ho, Deputy Prime Minister of South Korea and Minister of Strategy and Finance, said, “The discussion over the issue of the Korea-Japan currency swap was suspended in 2015, and is planned to be conducted at the Korea-Japan Finance Ministers’ Meeting…We will do our best so that a meaningful result will be entailed.”

 

At the Korea-Japan Finance Ministers’ Meeting, Deputy Prime Minister Choo and Japan’s Finance Minister Shun'ichi Suzuki will discuss, in addition to the currency swap, the current global economic trend and strengthening of cooperation with the major 20 countries (G20).

 

The Korea-Japan Finance Ministers’ Meeting, which began in 2006, was temporarily suspended from August 2016, when the then Deputy Prime Minister and Finance Minister Yoo Il-Ho of Korea, met with Aso Taro, Japan’s Deputy Prime Minister and Finance Minister. This meeting will be the first in about seven years.

 

(Provided by Yonhap News)

By - KITA.Net (http://kita.org/about/newsView.do?id=&no=2795&searchWrd=&pageIndex=1)