SEOUL Dec 4 Trade giants China and South Korea
have agreed to use their currency swap agreement valued at $59
billion to boost the use of the yuan and won in bilateral trade,
Seoul's finance ministry and central bank said on Tuesday.
Central banks of the two countries will begin lending
trading firms yuan and won through banks from later this month
for use in settling trade bills, the Ministry of Strategy and
Finance and the Bank of Korea said in a joint statement.
The swap deal for 64 trillion won ($59 billion) or 360
billion yuan was formed late last year to help boost the pool of
currencies the two countries can tap into at times of stress in
addition to official foreign reserves.
China is South Korea's largest export market, taking in
about one-quarter of the smaller neighbour's total overseas
sales, but payments made in yuan or won accounted for only about
3 percent as the bulk of it was settled in U.S. dollars.
China is the world's largest exporter and South Korea the
seventh-biggest, with the two accounting for a combined 13
percent of the world goods exports last year, World Trade
Organisation data shows.
China has signed a series of bilateral currency pacts with a
number of foreign countries as part of efforts to promote the
use of the yuan in cross-border trade and investment.
($1 = 1083.1000 Korean won)
(Reporting by Christine Kim; Editing by Choonsik Yoo & Kim