The central banks of China and the Republic of Korea (ROK) signed a US$2 billion currency swap deal June 25, 2002, a move that was hailed by both sides as conducive to bilateral cooperation and regional financial stability.
Dai Xianglong, governor of the People's Bank of China and Park Seung, governor of the Bank of Korea, signed the contract, Tuesday's China Daily reported.
The deal was especially meaningful at the moment, when the two countries were celebrating the 10th anniversary of the establishment of diplomatic ties, Dai was quoted as saying.
The pact is forged within the framework of the Chiang Mai Initiative, which aims to build closer monetary ties by creating anetwork of central bank currency swaps among the Association of Southeast Asian Nations plus China, Japan and the Republic of Korea (ASEAN+3).
The idea of the swap is to financially help members of the group when the value of a member's currency falls under selling pressure, something seen during the 1997-98 financial crisis in the region.
China had signed two currency swap contracts before it struck the deal with ROK, a 2-billion-US-dollar deal with Thailand last December and a 3-billion-US-dollar scheme with Japan in March.
China is now ROK's third largest trade partner and ROK is China's fourth largest. Trade volumes between the two stood at 36 billion US dollars in 2001.
