South Korea is seeking to begin supplying US dollars under its bilateral currency swap arrangement with the United States next week, a Bank of Korea (BOK) official said Wednesday, a move that is widely expected to help ease dollar shortage caused by the new coronavirus pandemic.

Negotiations are underway to finalize the currency swap deal, BOK Dep. Gov. Ryoo Sang-dai told reporters.

"There are many issues that need to be discussed, but (the talks) are moving forward without any major difficulty," he said.

The BOK earlier said it has agreed to a $60 billion currency swap arrangement with the US Federal Reserve.

Ryoo said the money will be supplied in several installments but that the BOK is working to make sure the first batch will be "considerably sizable."

The currency swap deal marks the second of its kind to be signed between South Korea and the US

The BOK said the country supplied a total of $16.4 billion under its first currency swap agreement worth $30 billion.

The country supplied $4 billion in the first batch of installments under the 2008 agreement, the official noted.

"This time, we plan to supply a much greater amount in the first installment," he said.

South Korea has increasingly been facing a dollar shortage amid a market rout triggered by the spread of COVID-19.

The Korean won closed at 1,249.60 won per dollar Tuesday, down 91.5 won, or 7.9 percent, from the closing rate of 1,158.10 won per dollar on Jan. 20, when South Korea reported its first confirmed case of the viral disease.

South Korea has bilateral currency swap arrangements, worth more than $193 billion in total, with eight other countries, including Australia, Canada and China.

It also holds the world's ninth-largest foreign exchange reserves, which stood at $409.17 billion at end-February, according to the BOK. (Yonhap)