BOK retrieves US$13.52 bln in FX liquidity

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SEOUL, May 18 (Yonhap) -- South Korea's central bank said Monday it has retrieved
more than half of the foreign currency it provided to local banks to ease dollar
shortages that emerged in the wake of recent global financial turmoil.
The Bank of Korea (BOK) said it has recovered US$13.52 billion out of a total of
$26.62 billion it pumped into cash-strapped banks by tapping foreign reserves or
a currency swap line with the U.S. Federal Reserve.
The BOK also said it plans to re-offer up to $2.5 billion to lenders Tuesday,
less than what it had previously supplied, as the country's trade balance and
overseas borrowing conditions improve.
The central bank will supply the amount through 84-day swap deals out of $4
billion in loans it extended in late February that mature on Thursday.
The new liquidity will be supplied out of the $30 billion that the central bank
secured through a currency swap agreement with the Fed 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.
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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