South Korea is in discussions with the United States to establish a bilateral foreign exchange swap line as part of ongoing trade negotiations. The move comes amid growing concerns that proposed U.S. investment levels could impact the Korean won’s stability, according to Finance Minister Koo Yun-cheol.
During a parliamentary session on Monday, Koo noted that Seoul is considering either a conditional or unlimited swap arrangement to safeguard its currency market. He highlighted that South Korea can manage up to $20 billion in direct annual investment in the U.S. without straining its central bank reserves — far below the $350 billion outlined in the initial deal reached in July.
Koo clarified that South Korea’s approach views most of the $350 billion as loans and guarantees rather than direct investment. This position contrasts with earlier remarks by former U.S. President Donald Trump, who stated that Seoul would provide the funds “upfront.”
The finance minister added that Washington now seems to understand South Korea’s position “to some degree.” Similarly, Foreign Minister Cho Hyun mentioned during a separate session that there had been “positive signals” from the U.S. regarding the proposal.
The presidential office also confirmed that the U.S. has responded to a revised proposal made last month, which includes a request for a currency swap line. Presidential Secretary Kim Yong-beom previously said that the revised plan reflects Seoul’s push for financial stability amid expanding trade relations.
South Korea aims to finalize its trade agreement with the U.S. by late October, during the upcoming Asia-Pacific summit in Gyeongju. The event is expected to feature high-level discussions between U.S. President Donald Trump and Chinese President Xi Jinping, potentially shaping future regional trade dynamics.