BOK to re-offer US$2.5 bln to local banks

SEOUL, May 18 (Yonhap) -- South Korea's central bank said Monday it will supply
US$2.5 billion to local banks as the country's trade balance and overseas
borrowing conditions improve.
The Bank of Korea (BOK) said it plans to re-offer up to $2.5 billion to local
lenders through 84-day swap deals on Tuesday out of $4 billion in loans it
extended in late February 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.
If the total amount of the offer is fully subscribed, the move will lower the
amount of the swap line tapped by the BOK to $12.5 billion from the current $14
billion, it added.
Meanwhile, amid improving foreign currency conditions, the BOK said it will
retrieve a total of $2 billion this week that it provided to the swap market in
February and will not re-supply the funds to the financial system.
Since the collapse of Lehman Brothers Holdings Inc., the BOK has provided a total
of $26.62 billion in dollar liquidity to cash-strapped banks by tapping foreign
reserves or its currency swap line with the Fed.
Local banks, saddled with high overseas short-term borrowing, had been suffering
from dollar shortages, sparking concerns they may face difficulty in meeting
financial needs and servicing their debt.
South Korea's foreign exchange reserves rose by the largest monthly amount in
more than three years in April. The reserves totaled $212.48 billion as of the
end of April, the sixth-largest in the world.
sooyeon@yna.co.kr
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