SEOUL - South Korea and Malaysia on Sunday signed a currency swap agreement worth $4.7 billion, Seoul’s central bank said, in a move to encourage bilateral trade and help curb currency swings.
The latest agreement allows the two Asian nations to purchase and repurchase each other’s currency of up to 5 trillion won ($4.7 billion), or 15 billion ringgit, the central Bank of Korea said in a statement. The deal—valid for three years and renewable upon agreement—will allow greater flexibility for businesses to use local currencies for trades that have been commonly settled in US dollars, the two countries’ central banks said in a joint statement.
The latest agreement is the third currency swap deal South Korea has signed this month in a move to guard against financial turmoil and encourage trade with other emerging markets.
Asia’s fourth-largest economy earlier this month struck currency swap deals worth $10 billion and $5.4 billion with Indonesia and the United Arab Emirates, respectively.