Seoul: South Korea and Switzerland have agreed to extend their bilateral currency swap agreement, Seoul's finance ministry announced. The 18.5 trillion-won (US$12.4 billion) currency swap will be extended for another five years until March 1, 2031.

According to Yonhap News Agency, the Ministry of Economy and Finance stated that the bilateral swap agreement was first signed in 2018 and extended in 2021, making this the second renewal. The ministry emphasized that Switzerland issues a major global reserve currency, and the renewal of the currency swap will further strengthen South Korea's foreign exchange safety net. This safety net can be utilized during times of financial crises.

A currency swap is a tool used to defend against financial turmoil. It allows a country facing a liquidity crunch to borrow funds from another country using its own currency.