BOK buys 1 tln won in state bonds to calm market

SEOUL, Nov. 19 (Yonhap) -- South Korea's central bank on Wednesday bought 1 trillion won (US$688.2 million) worth of government bonds from banks and other financial institutions with no strings attached in a bid to stabilize the debt market.

The Bank of Korea (BOK) usually buys financial institutions' bond holdings or
sells its own bond holdings to them via repurchase agreements, which require the
institutions to repurchase or resell them at a later date.
"The BOK purchased 1 trillion won in government bonds through an auction. A total
of 2.44 trillion won was offered for bidding," the BOK said.
On Monday, the BOK decided to purchase treasury bonds in a move to calm the debt
market and increase its holdings of state bonds for repurchase agreement
operations.
The repurchase agreement is the central bank's main method of releasing liquidity
into the market in a credit crunch and of siphoning off excess liquidity.
sooyeon@yna.co.kr
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