Hong is in the U.S. capital for the Group of 20 finance ministers and central bank governors' meeting, as well as meetings of the International Monetary Fund and the World Bank.

Hong and Frydenberg said they will support both central banks' financial cooperation in terms of the 2017 currency swap deal that expires in February next year. 

The current deal allows for the exchange of up to 9 trillion won ($7.5 billion) or A$10 billion ($6.8 billion) in local currencies between the two central banks. Under the initial swap deal in 2014, the exchange of local currencies was set at up to 5 trillion won or A$5 billion.

The swap deal is set to expire Feb. 7, 2020, and could be extended by consent from both sides.

A currency swap is a tool used to defend against financial turmoil by allowing a country beset by a liquidity crunch to borrow money from others with its own currency.

South Korea has swap deals with Canada, China, Malaysia and Indonesia. (Yonhap)