Bank of Korea arranges currency swap

Nov. 27, 2008 at 2:02 PM

SEOUL, Nov. 27 (UPI) -- The Bank of Korea said Thursday it would receive $4 billion through a U.S. Federal Reserve currency swap to shore up the won.

The won has fallen 37 percent against the dollar this year as investors have pulled back from Korean investments and the bank has used portion of its foreign exchange reserves to prop up the won and add liquidity to its financial system, Yonhap news agency reported.

The swap is part of a $30 billion arrangement with the U.S. central bank, which is in place through April 30.

The bank is seeking similar arrangements with Japan and China.

"The currency swap deal with the U.S. is nothing new," Kim Yong-joon, a researcher at Korean Center for International Finance told the news service. "The move will help relieve market concerns to some degree ... but more steps such as currency swaps with China and Japan are necessary to curb the won's fall against the dollar," he said.

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