BOK offers US$2 bln in loans to local banks

SEOUL, April 14 (Yonhap) -- South Korea's central bank said Tuesday it has
supplied US$2 billion to local banks, less than what it had previously offered,
as the country's trade balance and overseas borrowing conditions improve.
The Bank of Korea (BOK) said it re-offered $2 billion to 16 local lenders through
84-day swap deals earlier in the day out of $3 billion in loans it extended in
late-January that mature on Thursday.
The money is part of a $30 billion currency swap agreement signed with the U.S.
Federal Reserve in late October.
The move brought down the total amount of the swap line tapped by the BOK to $14
billion from the previous $15 billion, it added.
The central bank said the country's trade balance is expected to remain in the
black in April and that foreign currency money market conditions have
considerably improved, helped by the efforts of local banks and companies to
borrow from overseas.
The BOK has been reducing its dollar supply since late last month as foreign
currency market conditions improved.
Hit by the collapse of Lehman Brothers Holdings Inc., local banks had been
suffering from dollar shortages, sparking concerns they may face difficulty in
meeting financial needs and servicing their debt.
Since October, the BOK has provided dollar liquidity to cash-strapped banks by
tapping 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.
sooyeon@yna.co.kr
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