In a first, 12 South Korean banks have been cleared to extend renminbi-denominated loans to Korean traders, and the Korea Exchange Bank became the first to do so. "Borrowing costs for the Chinese yuan are higher than those for the U.S. dollar funds. But the yuan fund from the yuan-won swap line will reduce currency risks and help local trade firms diversify their trade settlement currency," said Eun Ho-sung, head of the Bank of Korea's international financial stability team.

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