China and South Korea Sign $49 Billion Currency Swap Deal to Strengthen Financial Ties
China and South Korea have inked a five-year bilateral currency swap agreement worth 70 trillion won ($49.24 billion) to bolster economic cooperation. The deal, finalized during high-level talks between the Bank of Korea and the People’s Bank of China, allows direct exchange of the won and yuan within set limits.
The agreement aims to stabilize financial markets, facilitate trade, and ensure liquidity during crises. It replaces an expiring 2025 arrangement and reflects Seoul’s strategy to reduce dollar dependency in regional transactions. This aligns with broader Asian efforts to diversify away from USD dominance, mirroring similar moves among BRICS nations and ASEAN economies.
Growing confidence in national currencies and concerns about external monetary shocks are driving this shift. Analysts view the pact as critical amid global economic headwinds including energy price volatility and trade fragmentation.
