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Brexit causes Korea's foreign exchange holdings to fall US$10 bil.

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• published: 05 Jul 2016
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브렉시트 여파로 외환보유액 감소 Britain's decision to bid farewell to the European Union is causing some instability around the world,... and Korea is no exception. The initial shock has subsided,... but the lingering uncertainties are having an impact on Korea's foreign exchange holdings, prompting Korea to take stock of its options. Hwang Hojun has the story. The instability continues. The Bank of Korea announced on Tuesday that Korea's foreign exchange holdings have fallen by ten billion U.S. dollars compared to the amount recorded in May. Reserves are now below three-hundred-70 billion dollars for the first time since the end of March. The central bank attributes the decrease to the fall in the value amount when converting foreign currency assets, including the British pound and other currencies, into U.S. dollars. Since the UK voted in favor of Brexit late last month, the value of the pound has plunged eight percent and the euro, zero-point-two percent... from where it was in May. As experts expect the greenback to continue to gain ground, some are raising the idea of Korea renewing its currency swap agreement with the U.S., which ended in early 2010. A currency swap deal is when two countries agree to exchange two currencies at a certain exchange rate during financial emergencies. Once the initial agreement is set, cash flows can be exchanged in the appropriate currency for the contracted time. "Considering the exchange rate market can help stabilize the capital market, we're planning to urge the government to expand currency swap deals with the U.S. and China." However, the Korean government is cautiously assessing its options as currency swap deals are only a viable option when there's mutual agreement between the two countries on the need for them. Hwang Hojun, Arirang News. Visit ‘Arirang News’ Official Pages Facebook(NEWS): http://www.facebook.com/newsarirang Homepage: http://www.arirang.com Facebook: http://www.facebook.com/arirangtv Twitter: http://twitter.com/arirangworld Instagram: http://instagram.com/arirangworld