Expiration of the Measure to Increase the Size of the Bilateral Swap Arrangements

October 9, 2012
Bank of Japan

The Ministry of Finance of Japan and the Bank of Japan announce, in coordination with the Ministry of Strategy and Finance of Korea and the Bank of Korea, the expiration of the temporary measure^* to increase the maximum amount of the bilateral currency swap arrangements as of October 31, 2012, as scheduled.

The finance ministries and the central banks of both countries believe that this measure has significantly contributed to mitigating adverse influences of the global financial turmoil on the two economies and also to securing and ensuring stability of not only the Korean foreign exchange market but also the regional financial markets. The four parties evaluate the measure as mutually beneficial.

Given the stable financial markets and the sound macroeconomic condition of both countries, they concluded that the extension of the increase of the bilateral swap arrangements is unnecessary. They also agreed that they will cooperate in an appropriate manner as the need arises while closely monitoring the global economic condition as well as that of both countries.

• The Bank of Japan and the Bank of Korea increased the maximum amount of the bilateral swap arrangement from 3 billion US dollars equivalent to 30 billion US dollars equivalent as a temporary measure effective until the end of October 2012. In addition to the bilateral swap arrangement amounting to 10 billion US dollars under the CMI(Chiang Mai Initiative), the Ministry of Finance of Japan and the Bank of Korea established a new bilateral USD/local currency swap arrangement of 30 billion US dollars effective until the end of October 2012.

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