By Kim Eun-young and Yoon Sojung

Korea and Canada have signed a standing bilateral liquidity swap agreement with no stipulated ceiling.

Bank of Korea Governor Lee Juyeol and Governor Stephen S. Poloz of the Bank of Canada signed the standing currency swap deal at the head offices of the Bank of Canada in Ottawa on Nov. 15.

The agreement allows Korea to secure a powerful “safety net” that can be used in case of financial crisis.

Deputy Prime Minister and Minister of Strategy and Finance Kim Dong Yeon said on Nov. 16 that, “As the agreement is the highest level of financial cooperation, it will further deepen the close cooperative relationship between Korea and Canada in the business and financial sectors.”

A currency swap is a type of credit contract between central banks that ensures financial stability. It allows central banks to borrow the currency of the partner country in order to support domestic financial stability.

eykim86@korea.kr