BOK offers US$2 bln in loans to local banks

SEOUL, April 7 (Yonhap) -- South Korea's central bank said Tuesday it has
provided US$2 billion in loans to local banks, which have been suffering from a
dollar liquidity crunch, by tapping its currency swap line with the U.S. Federal
Reserve.
The Bank of Korea said it re-offered $2 billion to local lenders out of the $3
billion in loans it extended in mid-January, which mature Thursday.
This brings the total amount the BOK has tapped from the $30-billion swap line to
$15 billion.
A total of 14 financial institutions participated in the fully-subscribed
auction, bidding for $3.6 billion. The loans have an average annual interest rate
of 1.32 percent and will mature in 84 days.
South Korea's foreign currency liquidity conditions are improving thanks to local
banks' efforts to beef up overseas borrowing and a current account surplus.
Hit by the collapse of Lehman Brothers Holdings Inc., local banks have been
suffering from a dollar shortage, sparking concerns they may have difficulty in
meeting financing needs and servicing their debts.
Since October, the BOK has provided dollar liquidity to cash-strapped banks by
tapping foreign reserves or the currency swap line with the Fed.
sooyeon@yna.co.kr
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