S. Korea, Japan to end currency swap deal amid sour ties

South Korea and Japan agreed on Monday to end a bilateral currency swap deal amid frayed diplomatic ties between the two countries.

The agreement between Seoul and Tokyo to offer 10 billion U.S. dollars in return for the same amount of funds of each currency at a time of crisis would end on Feb. 23 without further extension, according to a statement by the Bank of Korea (BOK) and the Ministry of Strategy and Finance.

The two countries launched the deal at 2 billion dollars in July 2001, before expanding it to 70 billion dollars in October 2012.

Since then, the scale of the deal continued to decline after former South Korean President Lee Myung-bak visited the Dokdo islets in August 2012, which are claimed by both countries.

Since her inauguration in February 2013, President Park Geun- hye has refused to hold face-to-face talks with her Japanese counterpart Shinzo Abe, citing his wrong perception of history.

The end of the currency swap deal was also attributed to sufficient foreign exchange reserves of South Korea that reached 362.19 billion U.S. dollars as of end-January. South Korea recorded 89.42 billion dollars in current account surplus last year. Endi