Bangkok:Seoul South Korea has reached an agreement with Japan to extend their $10 billion currency swap arrangement by another three years. This agreement, initially set to expire next month, aims to further strengthen the economic ties between the two nations, as announced by the South Korean finance ministry.

According to Yonhap News Agency, Finance Minister Lee Hyoung-il and his Japanese counterpart, Satsuki Katayama, finalized the agreement during a meeting in Bangkok. This meeting was held on the sidelines of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group.

Originally signed in December 2023, the currency swap deal was due to expire in November. The new agreement ensures that the arrangement, involving the U.S. dollar, will continue through November 2029 without any change in its size.

A currency swap serves as a financial tool to help countries facing liquidity shortages by allowing them to exchange their currency for foreign currency. During the meeting, both officials noted that their foreign exchange authorities currently have ample liquidity. They described the currency swap as a testament to the cooperative relationship between South Korea and Japan.

Additionally, the two sides discussed enhancing economic and financial exchanges and agreed to hold a ministerial meeting in South Korea at the earliest opportunity.