SEOUL, Jan. 3 (Yonhap) -- South Korea has increased money allocated to its inter-Korean cooperation fund this year in anticipation of improved ties with North Korea, sources said Thursday.

Sources at the Ministry of Unification said the 2013 budget passed by parliament Tuesday set aside 1.09 trillion won (US$1.02 billion) in operating expenses for the cooperation fund, up 9.1 percent from a little over 1 trillion won last year. In addition the ministry's budget has been increased by 4.4 percent on-year to 222.2 billion won.