(3rd LD) S. Korea, U.S. to sign currency swap contract: sources

Yonhap News ^ | 10/29/08

[TigerLikesRooster]

(3rd LD) S. Korea, U.S. to sign currency swap contract: sources

SEOUL, Oct. 29 (Yonhap) -- South Korea will likely sign a currency swap contract soon with the United States in a bid to ease a dollar-funding shortage amid deepening global financial turmoil, multiple finance ministry sources said Wednesday.

The final decision will be announced later on Wednesday or early Thursday (Seoul time) by the U.S. Federal Reserve Board when it meets to decide on its key interest rates, a high-ranking official said on condition of anonymity, saying he is "optimistic" about the results. He declined to elaborate.

Details on the exact scale of the currency swap have yet to be confirmed. Other related officials said that talks are currently "underway," and that they are "close to a deal." A delegation from the U.S. Department of the Treasury is in South Korea to discuss the currency swap issue with their South Korean counterparts, a separate source said on condition of anonymity.

South Korea has been trying to secure more liquidity as global capital markets are in a slump due to deepening woes over the U.S.-sparked financial turbulence.

The government is grappling to stabilize its wobbling financial markets with a raft of measures including US$100 billion worth of state guarantees for overseas debts owed by cash-strapped local banks.

Banks and companies are finding it difficult to secure enough dollars to service their debts and pay for business activities. Increased dollar demand has put downward pressure on the local currency, with the won losing around 34 percent so far this year.

Rumors circulated earlier that Seoul was seeking a currency swap with Washington as part of efforts to bring calm to the financial markets, but officials continued to dismiss the reports.

According to ministry sources, the government initiated dialogue over the currency swap with the United States, and has received a "positive" response.

[TigerLikesRooster]

Originally S. Korea said its exposure to Lehman Brothers' failure is just $720 million, but there are claims that it is some 13~15 times more. There must be some hidden skeletons in S. Korean banks which are not outed yet, just like any other banks in the industrialized world. And then there is this development.

Korea Development Bank to Sell Short-Term Debt to Fed (Update2)

[TigerLikesRooster]

Ping!

[Red Badger]

I wonder if this “currency swap” deal has any share purchases of Korean banks hidden inside?..............

[TigerLikesRooster]

I don't really know. Things in finance are usually opaque, covered with thick fog of secrecy, distracting noise, and disinformation.

[Red Badger]

Things in finance are usually opaque, covered with thick fog of secrecy, distracting noise, and disinformation.

You mean like leftist politics?............

[TigerLikesRooster]

Unfortunately, leftist Modus Operandi applies equally well to finance.
Leftist political propaganda and Wall St. financial propaganda are the results of the same principle applied to two different areas.

[nicola_tesla]

Seems like the American taxpayer is buying up the world. This will not end well.

[Red Badger]

Leftist political propaganda and Wall St. financial propaganda are the results of the same principle applied to two different areas.

There are three things that require absolute secrecy to be successful:

1. Political Deals

2. Financial Deals

3. Extramarital Affairs

...and all for the same reason...........

[B4Ranch]

I’m surprised that we haven’t heard more about the over abundance of counterfeit dollar bills floating around Europe and Asia.