South Korea has agreed on currency swap line extension with Japan by six months, South Korea's Bank of Korea (BOK) said on Tuesday.

In mid-December, the BOK settled a deal with the Bank of Japan to expand the won-yen swap line from US$3 billion to US$20 billion.

In line with the December deal, the current agreement will extend the currency swap deadline by six months to October 30, the BOK said.

The BOK believes that the move will help mitigate adverse influences of the financial turmoil and contribute to stabilizing regional financial markets, it said in a statement.

The central bank also holds a won-dollar swap line worth US$10 billion with Japan, in case of an emergency.

The move comes about two months after the nation succeeded in extending its currency swap line of US$30 billion with the US Federal Reserve until October 30.

South Korea's foreign reserves topped US$201.54 billion as of end-February, the sixth-largest in the world.

(Xinhua News Agency March 31, 2009)