The heads of the central banks of South Korea, China and Japan are set to begin an annual meeting later Wednesday, the Bank of Korea said, amid keen interest on a currency swap deal between Seoul and Beijing.

Bank of Korea Gov. Lee Ju-yeol is scheduled to host a banquet for his Chinese counterpart Zhou Xiaochuan and Japanese central banker Haruhiko Kuroda in Songdo, west of Seoul.

The three "will exchange views on recent economic and financial developments in the three countries" during an official meeting Thursday, the BOK said.
 

Media attention has focused on whether Lee and Zhou will discuss a bilateral currency swap agreement that is set to expire next month.

The BOK said a currency swap deal between Seoul and Beijing is not on the agenda of the tripartite governors' meeting.

Some observers here voiced concerns that the diplomatic tension between Seoul and Beijing could jeopardize the currency swap agreement.

Last year, South Korea and China agreed to prolong the bilateral deal, which was first initiated in 2009 with a value of 32 trillion won ($27 billion) and expanded to 64 trillion won in 2011.

China has taken a series of economic retaliations against South Korea, including a ban on group tours to South Korea, in protest of the deployment of an advanced US missile defense system in South Korea.

Seoul and Washington said the Terminal High Altitude Area Defense system is only meant to counter North Korea's evolving nuclear and missile threats. But China has repeatedly pressed South Korea to withdraw the missile system out of concern that the deployment could hurt Beijing's security interests. (Yonhap)