BOK offers US$8.7 bil. in loans to local banks using U.S. currency swap


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South Korea's central bank has started auctioning off some of the dollars secured through the currency swap deal with the U.S.
In the first tranche, local banks got more than 8 billion dollars, but that was actually less than what was on offer.
That could mean the local dollar shortage is not as severe as expected.
Lee Seung-jae has more.
Eight-point-seven-two billion U.S. dollars.
That's the amount the Bank of Korea offered in loans to local banks and other financial institutions on Tuesday,... during a 30-minute online auction to provide them with 800 million dollars in seven-day debt and 7-point-9-2 billion dollars to be paid back within 84-days.
The figure was below the BOK's initial expectation of 10 billion dollars,... which the central bank said was due to the considerable easing of the local dollar crunch.
"The reason why the bidding amount was smaller compared to the bidding size is because it seems overall, foreign currency liquidity isn't that bad right now."
According to the BOK,.. the dollar injection will stabilize the currency market,... with more auctions to take place depending on the market situation.
The amount is the first batch of the central bank's 60 billion dollar currency swap agreement it recently signed with the Federal Reserve,... aimed at tackling a dollar crunch and a plunge in the local currency amid the COVID-19 outbreak,... and flat-lining oil prices.
South Korea signed its first currency swap deal with the U.S. in 2008,... to cushion the country from the fallout caused by the global financial crisis.
Successful bidders from Tuesday's auction will receive the dollars within the next 24 to 48 hours.
Lee Seung-jae, Arirang News.

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