Seoul, Washington Discuss FX Swap Amid Trade Deal

South Korea is in talks with the U.S.

to establish a bilateral foreign exchange swap line as part of a broader trade deal, amid concerns that proposed U.S.

investments could disrupt its currency market.

Finance Minister Koo Yun-cheol told parliament Monday that Seoul may seek a conditional swap line, estimating it could invest up to USD 20 billion annually in the U.S.

without draining central bank reserves—far below the USD 350 billion outlined in July’s initial agreement.

South Korea maintains that most of the USD 350 billion would be in loans and guarantees, not direct investment, due to FX risks, while President Trump had said Seoul would pay “upfront.” Koo noted Washington now understands South Korea’s concerns “to some degree.” The presidential office confirmed a response to Seoul’s revised proposal, which included the swap line request.

The deal is expected to be formalized at the Asia-Pacific summit in Gyeongju later this month.