S. Korea, China yet to reach currency swap deal
THAAD tensions blamed
Korea JoongAng Daily is reporting that the central banks of Korea and China are yet to announce a decision on the renewal of a bilateral currency swap arrangement, raising doubts about the future of the deal that was due to expire on Tuesday.
The inability to strike a deal is being traced to Chinese displeasure over South Korea’s deployment of a US-made Terminal High Altitude Area Defense (THAAD) anti-missile system inside the country to counter a nuclear threat from Pyongyang.
The Seoul-based newspaper says the Bank of Korea and South Korea’s Finance Ministry have both confirmed that discussions are still underway.
“Nothing has been decided so far and a meeting [with the People’s Bank of China] is scheduled today,” said Bank of Korea Governor Lee Ju-yeol.
Multiple media outlets in South Korea had previously reported that the two sides had agreed to extend the US$56 billion currency contract for another three years, despite speculation that Korea’s decision to deploy THAAD would make China turn its back on the deal.
The Bank of Korea refuted the claims, saying that the bank “is unable to confirm the reports since the two parties are in talks.”