South Korea's finance minister said Wednesday that the current pace of the local currency's appreciation is not a problem should the volatility of the won-dollar rate remains limited.

"If the volatility isn't too high, I think the won's current ascent versus the US dollar is not a big problem," Finance Minister Yoo Il-ho said after a ministerial level meeting in Seoul.

"The latest currency volatility seems to be high to some extent, but it's not steep enough to be a problem."

Following the rate hike in the United States last week, the Korean won has been gaining ground against the greenback, reaching a five-month high on Monday.

South Korea's top economic policymaker also said he thinks the government will reach an agreement on extending a currency swap deal with China, which will expire in October.

"I don't think we will not be able to extend the swap deal with China," the official said. "China has made no comments on the issue so far."

Many are worried that the currency swap agreement with China is in danger due to rising political and diplomatic tensions surrounding the deployment of a US missile system, the Terminal High Altitude Area Defense.

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