BOK to supply 6.5 tln won to financial system this week

SEOUL, Dec. 15 (Yonhap) -- South Korea's central bank said Monday it will pump a
combined 6.5 trillion won (US$4.87 billion) in liquidity into the financial
system this week by buying longer-dated repurchase agreement deals.

According to the Bank of Korea (BOK), by purchasing of the 91-day deals, it will
supply 2.5 trillion won to financial firms on Monday. The central bank said it
will also hold auctions on Tuesday and Friday to supply 2 trillion won,
respectively.
A repurchase agreement is a deal whereby one party sells the other a security at
a specified price with a commitment to buy the security back at a later date. It
is the central bank's main method of releasing liquidity into the market in a
credit crunch and siphoning off excess liquidity.
sooyeon@yna.co.kr
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