Bank of Korea ready to provide more liquidity to stabilise money markets

105
1
Bank of Korea ready to provide more liquidity to stabilise money markets

After a surprise default by a developer earlier this year, the Bank of Korea is ready to provide more liquidity to stabilize short-term money markets, according to Deputy Governor Lee Sang-hyeong.

Credit strains have recently improved but uncertainty surrounding financial institutions money management is high as movements increase during the year-end season, Lee said Thursday. He said that the BOK would provide more liquidity via repo transactions.

The BOK plans to hold 2 -- 3 repo auctions by the end of the year.

A theme park developer has triggered the worst meltdown in South Korea's credit market since the global financial crisis after a default by a theme park developer. There has been a run up in short-term borrowing costs, according to Seoul officials.

One of the steps was to expand the eligibility of the eligible collateral banks when they receive loans from the central bank.