ID :
43269
Fri, 01/30/2009 - 07:08
Auther :
Shortlink :
https://www.oananews.org//node/43269
The shortlink copeid
BOK chief pledges to pump ample liquidity into financial system
SEOUL, Jan. 30 (Yonhap) -- South Korea's top central banker said Friday the Bank of Korea (BOK) will more actively pour liquidity into the financial system if mechanisms of bank lending do not work smoothly.
Global central banks have pumped massive liquidity into the financial markets and
made aggressive rate cuts to ease financial turbulence sparked by the collapse of
Lehman Brothers Holdings Inc. in the U.S. in mid-September.
"If the intermediary role of the financial market in making funds smoothly flow
is sharply weakened, the BOK will draw up measures to pump in more liquidity,"
BOK Gov. Lee Seong-tae said in a seminar.
Since October, the BOK has cut its key interest rate by a combined 2.75
percentage points to a record low of 2.5 percent in a bid to prevent the fallout
of the financial turmoil from heavily weighing on the real economy.
Since September, the BOK has poured more than 19 trillion won (US$13.8 billion)
in local currency liquidity into the financial system.
Local banks have been increasingly wary of providing more loans to households and
smaller firms as the slowing economy and the credit crunch are jacking up the
amount of bad loans.
Gov. Lee also said the growth of the South Korean economy is forecast to hit its
lowest level this year since the 6.9 percent contraction in 1998. He reiterated
his earlier pledge that the BOK will manage its monetary policy to bolster the
slowing economy and stabilize the financial market.
Asia's fourth-largest economy shrank 5.6 percent last quarter from three months
earlier, the sharpest fall since the Asian financial crisis a decade ago, due to
faltering exports and sluggish domestic demand.
The BOK said last week that the country's economic growth for this year may miss
the earlier forecast of 2 percent.
The government is targeting 3 percent for 2009, but many experts say economic
growth will likely fall to the 1-percent range this year, with some expecting a
recession for the first time in more than a decade.
sooyeon@yna.co.kr
(END)
Global central banks have pumped massive liquidity into the financial markets and
made aggressive rate cuts to ease financial turbulence sparked by the collapse of
Lehman Brothers Holdings Inc. in the U.S. in mid-September.
"If the intermediary role of the financial market in making funds smoothly flow
is sharply weakened, the BOK will draw up measures to pump in more liquidity,"
BOK Gov. Lee Seong-tae said in a seminar.
Since October, the BOK has cut its key interest rate by a combined 2.75
percentage points to a record low of 2.5 percent in a bid to prevent the fallout
of the financial turmoil from heavily weighing on the real economy.
Since September, the BOK has poured more than 19 trillion won (US$13.8 billion)
in local currency liquidity into the financial system.
Local banks have been increasingly wary of providing more loans to households and
smaller firms as the slowing economy and the credit crunch are jacking up the
amount of bad loans.
Gov. Lee also said the growth of the South Korean economy is forecast to hit its
lowest level this year since the 6.9 percent contraction in 1998. He reiterated
his earlier pledge that the BOK will manage its monetary policy to bolster the
slowing economy and stabilize the financial market.
Asia's fourth-largest economy shrank 5.6 percent last quarter from three months
earlier, the sharpest fall since the Asian financial crisis a decade ago, due to
faltering exports and sluggish domestic demand.
The BOK said last week that the country's economic growth for this year may miss
the earlier forecast of 2 percent.
The government is targeting 3 percent for 2009, but many experts say economic
growth will likely fall to the 1-percent range this year, with some expecting a
recession for the first time in more than a decade.
sooyeon@yna.co.kr
(END)
