Seoul Suggests "Unlimited" Currency Swap with US

(MENAFN) South Korea has put forward a proposal for an "unlimited" currency exchange arrangement with the United States, as optimism for a breakthrough in the continuing trade discussions remains low, according to a local press report on Monday.

The suggestion was raised during recent consultations aimed at protecting the Korean currency, as part of follow-up talks on a tariff arrangement concluded between the two nations in late July, a news agency stated.

Based on that framework agreement, South Korea committed to channel $350 billion into the US in return for Washington lowering its reciprocal tariffs on Korean goods from 25% down to 15%.

While the bulk of the pledged investment is expected to come through loans and credit guarantees, the US is insisting that a larger portion be delivered in direct monetary contributions.

Officials in Seoul have voiced concerns that such a significant outflow of dollars could provoke a steep surge in the won-dollar exchange rate.

By the close of last month, South Korea’s foreign currency reserves amounted to $416.3 billion.

South Korea and the US "are still negotiating the terms, and so it is difficult to say anything definitive about each side's position," presidential spokesperson Kang Yu-jung remarked on Sunday.

In connection with this, South Korea’s Trade Minister Yeo Han-koo is set to travel to the US on Monday to engage in further negotiations regarding the trade pact.

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