BOK auctions off US$3 bln to local banks

SEOUL, Jan. 20 (Yonhap) -- South Korea's central bank said Tuesday it has
provided over US$3 billion in loans to local banks, which have been suffering
from a dollar liquidity crunch in the wake of the U.S.-sparked global financial
turmoil.
The Bank of Korea (BOK) said the money is part of a $30 billion currency swap
agreement which it signed with the U.S. Federal Reserve in late October. The BOK
has tapped $16.35 billion from the swap line so far.
According to the BOK, 12 financial institutions participated in the auction,
bidding for $3.55 billion on offer. The loans have an average annual interest
rate of 1.19 percent and will mature in 84 days.
The move comes amid rising market jitters over South Korea's falling foreign
exchange reserves, the world's sixth-largest.
The country's foreign reserves -- which totaled $201.22 billion as of the end of
December -- fell for eight consecutive months in 2008 before climbing slightly in
December as a weaker U.S. dollar boosted the dollar value of assets in other
currencies.
South Korea also reached new currency swap arrangements with China and Japan in
late December, expanding its existing swap lines with the two countries to $30
billion each.
sooyeon@yna.co.kr
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