SEOUL, South Korea — South Korea and China have agreed to extend their currency swap deal, Seoul said Friday, easing concerns the deal would fall through due to tensions over a U.S. missile defense system.
Bank of Korea, South Korea's central bank, and its finance ministry said in a joint statement that the two Asian countries renewed the deal worth 64 trillion won or 360 billion yuan ($57 billion) for another three years.
The move keeps their already soured relationship from further deteriorating. South Korean companies' businesses have suffered in China amid friction over South Korea's deployment of a U.S. anti-missile system known as THAAD. Hyundai Motor Co. was one of the biggest victims of China's ire toward the U.S. missile defense system. The South Korean carmakers saw its sales in China during the first half of this year plunging to nearly half of last year's sales.
Currency swap deals allow countries to borrow money from other countries in their own currency, useful especially at a time of financial turmoil.
Bank of Korea said that the deal extension will help stabilize the financial markets and boost trade between the countries.
South Korea's foreign ministry welcomed the agreement, which will be a "stepping stone toward further cooperation between the two countries in other fields," its spokesman Noh Kyu-duk said at a media briefing.