SEOUL, March 23 (Yonhap) -- The Bank of Korea (BOK) on Monday said it will purchase an unspecified amount of local bonds this week to help prevent a possible liquidity crunch facing local brokerages amid a market rout sparked by fears of the new coronavirus outbreak.
The central bank said it will also expand the scope of its purchase program to include bonds issued by public enterprises.
"First, (the BOK) plans to purchase repurchase agreements (with 14 or 28-day maturities) on March 24," a ranking BOK official told reporters.
"Also, the purchase program will be expanded to include certain special bonds from public enterprises in addition to National Treasurys, government-guaranteed bonds, mortgage-backed securities and bank bonds," the official added.
The latest repo operations by the BOK come after daily crashes in the local stock market, largely caused by the global pandemic of COVID-19.
The BOK purchased 1.5 trillion won (US$1.18 billion) worth of local bonds last week when the benchmark Korea Composite Stock Price Index plummeted 8.39 percent to reach 1,457.64, the lowest since July 2009.
The local government earlier said it will set up bond and stock market stabilization funds worth at least 10 trillion won.
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