South Korea and Turkey have agreed to extend their currency swap deal by three years, the Bank of Korea (BOK) said Monday. In 2021, the two countries signed their first three-year, 2.3 trillion-won (roughly US$2 billion) currency swap agreement in a move to boost bilateral trade. The three-year agreement, signed by the BOK and the Central Bank of the Republic of Turkey, allows for the exchange of local currencies between the two countries. "This arrangement is designed to promote bilateral trade through a swap-financed trade settlement facility and financial cooperation between the two countries," the two central banks said in a statement. "The two sides expect that this will further strengthen collaboration between the two central banks," they said. A currency swap is a tool for defending against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency. Source: Yonhap News Agency