Seoul to Receive $4 Billion Under US Currency Swap

South Korea's central bank said Thursday that it will receive $4 billion from the U.S. Federal Reserve through a currency swap agreement to provide the greenback to dollar-starved local banks, according to Yonhap News Thursday.

The money to be provided Tuesday through an auction is part of a currency swap deal forged last month, in which the Fed will provide up to $30 billion to the Bank of Korea.

The agreement will be effective until April 30 next year.

The local currency has lost almost 37 percent against the dollar so far this year as foreign investors continued to pull money out of the local stock market due to global financial turmoil and a widening current account shortfall.

"The move will help ease dollar shortages at local banks, and help ease market jitters as well," a central bank official was quoted as saying by Yonhap News.

The won was quoted at 1,477.50 to the dollar as of 9:25 a.m., down 0.6 won from the previous session's close, after opening at 1,480.00.

The local currency fell on speculation that importers will buy the dollar to pay month-end bills.

South Korea is also seeking to expand similar deals with China and Japan to help stabilize the local currency market.

South Korea posted a record current account surplus in October, which may help ease downward pressure on the already-weak won, the central bank said earlier in the day.

Experts said the dollar supply from the Fed and a current account surplus will help stabilize the currency market, but market jitters still remained due to declining exports and a continued foreign sell-offs of local stocks.

The South Korean economy, Asia's fourth-largest, has seen its export growth slow in the past few months in tandem with a global economic slump, while its import bills increased sharply due to higher oil prices. South Korea is the world's fourth-largest oil importer.

South Korea's overseas sales, which account for more than half of gross domestic product, increased 10 percent in October from a year earlier, the weakest pace in 13 months.