BOK extends US$3 bln to local banks

SEOUL, Dec. 9 (Yonhap) -- South Korea's central bank said Tuesday it provided
funds worth US$3 billion, received through a currency swap arrangement with its
U.S. counterpart, to dollar-starved local banks through an auction.

In late October, the Bank of Korea (BOK) announced a $30 billion currency swap
agreement with the U.S. Federal Reserve and on Dec. 2, the BOK tapped a $4
billion currency swap line for the first time.
According to the BOK, a total of 14 financial institutions participated in the
auction, bidding for a combined $4.6 billion on offer. The loans were extended at
an annual interest rate of 5.58 percent on average, and have a maturity of 84
days, it said.
The move came as the country's foreign exchange reserves, the world's
sixth-largest, have been in decline mainly due to liquidity injections designed
to ease an ongoing credit crunch and financial jitters.
The foreign reserves totaled $200.51 billion as of end-November, marking the
eighth straight month of decline. South Korea is seeking to expand its existing
currency swap lines with China and Japan to help stabilize the local currency
market.
sooyeon@yna.co.kr
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