The Federal Reserve Wednesday announced a currency swap arrangement of up to $30 billion each with South Korea, Mexico, Brazil and Singapore to help ease dollar funding for major emerging economies amid the global financial crisis, Yonhap News reported.

"These new facilities will support the provision of U.S. dollar liquidity in amounts of up to $30 billion each by the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore," the Fed said in a statement, adding the arrangements will stay in effect until April 30, 2009.

The Fed said it established the new facility with these "four large and systemically important economies ... to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well-managed economies."

With the deal, South Korea has become one of 14 countries having such a temporary reciprocal currency arrangement with the U.S. Washington maintains such arrangements with 10 of the world's major advanced economies _ Australia, Canada, Denmark, England, the European Union, Japan, New Zealand, Norway, Sweden and Switzerland.

The Fed's announcement came almost concurrently with the International Monetary Fund's announcement that it will set up a "Short-Term Liquidity Facility" to establish quick-disbursing financing "for some emerging market countries, even those that have maintained sound macroeconomic frameworks ... that are facing temporary liquidity problems in the global capital markets."

"Disbursement of Fund resources can be up to 500 percent of quota, with a three-month maturity," according to the lending agency. "Eligible countries are allowed to draw a maximum of three times during any 12-month period."

South Korea's IMF quota was raised to 1.413 percent, or about $4.4 billion, earlier this year.

South Korea's top financial authorities welcomed the swap deal, saying it will contribute much to stabilizing the wobbling local financial system.

Strategy and Finance Minister Kang Man-soo was quoted as saying, "The opening of the swap line with the U.S. will likely play a big role in stabilizing our foreign currency and financial markets." "The Fed's decision will help accelerate the move to expand similar currency swap lines with Japan and China, intensifying concerted efforts among the three nations to stabilize financial systems in the Asian region."

Central Bank of Korea Governor Lee Seong-tae said the deal will help ease the dollar shortage of local lenders and stabilize the local financial market.

"The currency swap deal with the U.S. Fed will help stabilize the local financial market," Lee said. "The swap deal will also contribute to stabilizing the currency market."

Despite ample foreign reserves of more than $240 billion, South Korea's currency has plummeted to a 10-year low against the U.S. dollar as foreign investors continued to pull a huge amount of money out of local stocks amid concerns that local banks may face difficulty repaying short-term foreign debts.

"South Korea has made the swap deal as part of efforts to secure secondary support measures, not because of a shortage of foreign reserves," Lee said, adding the temporary arrangement, which will be in effect until April 30 next year, may be extended, if necessary.