S. Korea suggests establishing foreign exchange swap with US

(MENAFN) South Korea has suggested establishing an "unlimited" currency swap with the United States, as hopes remain slim for a breakthrough in ongoing trade negotiations between the two countries, according to reports.

The proposal was made during recent discussions aimed at safeguarding South Korea’s currency in follow-up talks regarding a tariff deal reached in late July. Under that agreement, South Korea committed to investing $350 billion in the US in return for Washington reducing its reciprocal tariffs on South Korean goods from 25% to 15%, as stated by reports.

While most of the planned investment is expected to take the form of loans and credit guarantees, the US is pushing for a larger portion to be delivered as direct cash. South Korea has expressed concern that significant dollar outflows could lead to a sharp increase in the won-dollar exchange rate. As of the end of last month, the country’s foreign reserves stood at $416.3 billion.

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

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