[BUSINESS] Korea and Indonesia sign a currency swap deal
D-Bo, Oct. 15, 2013, 1:24 p.m.
Korea has signed a US$10 billion currency swap deal with Indonesia. Currency swaps can be used to stabilize economies in a financial crisis, with the country facing economic woes borrowing from the treasuries of the other government using its own currency as collateral.
Finance Minister Hyun Oh-seok and Bank of Korea Chairman Kim Choong-soo reached the agreement in a meeting with their Indonesian counterparts in Washington on Saturday.
The deal involves the currencies of the respective countries rather than U.S. dollars and provides for W10.7 trillion (US$1=W1,072) being swapped with 115 trillion rupiahs. It is effective for three years and can be extended.