Korea's FX reserves slip in Sept., swap deal with China expires



한중 통화스와프 재협상 안갯속 9월 외환보유액 소폭 감소 For the first time in more than half a year, South Korea’s foreign exchange reserves takes a dip. A most …

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Korea's FX reserves slip in Sept., swap deal with China expires

한중 통화스와프 재협상 안갯속 9월 외환보유액 소폭 감소

For the first time in more than half a year, South Korea's foreign exchange reserves takes a dip.
A most worriesome trend, when combined with the central bank's apparent failure so far to renew a currency swap with China.
Lee Unshin looks beyond the digits.
According to the Bank of Korea, as of September, the nation's foreign exchange reserves stood at 384.67 billion U.S. dollars,... down 170 million from the previous month.
It is the first dip in Korea's foreign exchange reserves in seven months.
As of the end of August, the country was the world's ninth largest holder of foreign currency reserves.
Central bank data shows that the greenback strengthening in the global market lowered the value of non-dollar currencies, including the Korean Won, Euro and Japanese Yen.
Meanwhile China's reserves remained the highest in the world, rising for the 8th consecutive month to over 3.1 trillion dollars last month.
Seoul and Beijing's 56 billion dollar currency swap deal came to an end earlier this week... as the two nations failed to reach an agreement to renew the deal.
The deal had accounted for some 46-percent of Korea's total value of currency swap deals, it has with all countries.
BOK officials added that talks between Seoul and Beijing to renew the deal are still underway.
But experts have raised concerns that diplomatic tensions over Korea's decision to install the U.S. anti-missile system THAAD in its soil, could throw up roadblocks in the negotiations.
While things remain up in the air, market analysts reiterate that both countries would benefit from renewing the swap deal.
They also stressed the need for Korea to maintain a sufficient amount of foreign exchange reserves in case a new deal isn't reached.
Lee Unshin Arirang News.

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