ID :
54034
Mon, 04/06/2009 - 07:45
Auther :
Shortlink :
https://www.oananews.org//node/54034
The shortlink copeid
BOK to offer smaller US$2 bln in loans to local banks
SEOUL, April 6 (Yonhap) -- South Korea's central bank said Monday it will reduce its dollar supply to local banks this week as the country's trade balance is improving and overseas borrowing conditions brighten.
The Bank of Korea (BOK) said the money is part of a US$30 billion currency swap
agreement which it signed with the U.S. Federal Reserve in late October.
The central bank said it plans to auction off up to $2 billion to local lenders
on Tuesday, less than the $3 billion in loans that the bank extended in
mid-January, with its maturity falling on Thursday.
"The move comes as the country's trade balance is expected to remain in the black
in April and the foreign currency money market conditions have improved, helped
by local banks' efforts to borrow from overseas," the BOK said in a statement.
If the auction is fully subscribed this week, the total amount of the swap line
tapped by the BOK would shrink to $15 billion from the current $16 billion, it
added.
South Korea's trade surplus reached a record $4.6 billion in March as imports
dropped more sharply than exports. The country's current account swung to a
surplus in February due to a sharp fall in imports and the BOK predicted that
South Korea is likely to post a record surplus of around $5 billion for March.
"The BOK will flexibly decide on how much it will provide in dollar liquidity
after assessing global financial markets and the country's current account
balance," it added.
Hit by the collapse of Lehman Brothers Holdings Inc., local banks had been
suffering from dollar shortages, sparking concerns they may have difficulty in
meeting financing needs and servicing their debt.
Since October, the BOK has provided dollar liquidity to cash-strapped banks by
tapping the foreign reserves or its currency swap line with the Fed.
South Korea's foreign exchange reserves rose by the largest monthly amount in
more than two years in March. The reserves totaled $206.34 billion as of the end
of March, the sixth-largest in the world.
South Korea also reached new currency swap arrangements with China and Japan in
mid-December, expanding its existing swap lines with the two countries to $30
billion each.
The Bank of Korea (BOK) said the money is part of a US$30 billion currency swap
agreement which it signed with the U.S. Federal Reserve in late October.
The central bank said it plans to auction off up to $2 billion to local lenders
on Tuesday, less than the $3 billion in loans that the bank extended in
mid-January, with its maturity falling on Thursday.
"The move comes as the country's trade balance is expected to remain in the black
in April and the foreign currency money market conditions have improved, helped
by local banks' efforts to borrow from overseas," the BOK said in a statement.
If the auction is fully subscribed this week, the total amount of the swap line
tapped by the BOK would shrink to $15 billion from the current $16 billion, it
added.
South Korea's trade surplus reached a record $4.6 billion in March as imports
dropped more sharply than exports. The country's current account swung to a
surplus in February due to a sharp fall in imports and the BOK predicted that
South Korea is likely to post a record surplus of around $5 billion for March.
"The BOK will flexibly decide on how much it will provide in dollar liquidity
after assessing global financial markets and the country's current account
balance," it added.
Hit by the collapse of Lehman Brothers Holdings Inc., local banks had been
suffering from dollar shortages, sparking concerns they may have difficulty in
meeting financing needs and servicing their debt.
Since October, the BOK has provided dollar liquidity to cash-strapped banks by
tapping the foreign reserves or its currency swap line with the Fed.
South Korea's foreign exchange reserves rose by the largest monthly amount in
more than two years in March. The reserves totaled $206.34 billion as of the end
of March, the sixth-largest in the world.
South Korea also reached new currency swap arrangements with China and Japan in
mid-December, expanding its existing swap lines with the two countries to $30
billion each.
