politics

S Korea, Japan agree to expand currency swap deal

8 Comments

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8 Comments
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Any economic people on here today? Explain what this really does please.

-2 ( +1 / -3 )

Even out the value of both Korean and Japanese money for economic emergencies

0 ( +0 / -0 )

Let the japanese people live in peace.No more fun !!!

-2 ( +0 / -2 )

I'm not 100% sure but from what I've read it seems like trading currencies helps keep debt down and stabilize the fluctuations between exchange rates.

http://en.wikipedia.org/wiki/Currency_swap

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South Korea had a trade deficit of 36.12 billion dollars with Japan in 2010. (Japan exported more than Korea exported to Japan) Korea imports parts (core components) from Japan for their automobile and electronics industries. The Japanese government must make sure South Korea has the YEN (or dollars) to pay the Japanese exporters. This swap will benefit both governments.

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JapanGal: I don't believe this has anything to do with the currency exchange rate. I think it simply means that the central banks of both Japan and Korea can quickly access money (which are considered short term loans ) from each other in an economic emergency.

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Does this mean we'll have to start paying with won and the Korean'll pay with yen?

0 ( +0 / -0 )

Interesting thoughts. Still not really sure what it means, but will try to figure it out. Thanks for the thumbs. I must appear as a ding dong twit headed girl.

0 ( +1 / -1 )

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