South Korea is not "optimistic" about securing a currency swap agreement as a safeguard for the pledged $350 billion investment to the United States, according to Seoul's top security official, who nevertheless expected a trade deal to lower tariffs for Korean exports to eventually come through.
"Our government has suggested a currency swap line, but it will not be easy, given precedent in how the U.S. has handled such arrangements," National Security Adviser Wi Sung-lac told local reporters Monday.
Wi emphasized that a currency swap alone cannot not resolve all issues as "sufficient conditions" must be met for a deal to be finalized. He was referring to the stalemated negotiations between Seoul and Washington over the Korean proposed $350 billion investment in return for the lowering of tariffs on Korean goods from 25 percent to 15 percent.
U.S. President Donald Trump demanded Seoul to provide the funds "up front", which Seoul resists in fear of stoking a financial crisis as such bulky outlay amounts to 80 percent of the country's foreign exchange reserve. The U.S. dollar has been hovering above 1,400 won amid the concerns.
South Korea last drew a temporary currency swap lines with the U.S. during the 2008 global financial crisis and 2020 pandemic.
The former career diplomat however said he was "not that pessimistic" about an eventual deal, expressing hope for a momentum during the upcoming Asia-Pacific Economic Cooperation (APEC) summit to be held in South Korea.
On defense matters, Wi said Seoul and Washington have "reached equilibrium" on security package that includes Korea's increase in defense spending and revisions to a nuclear pact.
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