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BOK lends US$2.1 bln more to banks via U.S. currency swap

Finance 14:12 April 21, 2020

SEOUL, April 21 (Yonhap) -- The Bank of Korea (BOK) delivered an additional US$2.12 billion to local banks Tuesday under a currency swap deal with its U.S. counterpart in a bid to stabilize the local foreign exchange market.

The BOK held its fourth online auction to provide up to $4 billion in six-day debt and 84-day loans to commercial banks and state lenders.

Bids undershot the central bank target of $3.5 billion in 84-day loans and $500 million in seven-day loans.

No bids were placed for the six-day loans, the BOK said, adding successful bidders will receive dollars Thursday.

BOK lends US$2.1 bln more to banks via U.S. currency swap - 1

"The size of bids is similar to that of last week. The market's foreign currency liquidity situation appears good, given a recent surge in foreign exchange deposits by businesses and securities firms," the central bank said.

The BOK said Monday that local firms' foreign currency deposits at banks came to $59.35 billion as of end-March, up $6.51 billion from the previous month.

The BOK had earlier extended some $15 billion to banks using its $60 billion currency swap line with the U.S. Federal Reserve, signed last month at the height of currency fluctuations due to the coronavirus pandemic.

The Korean won plunged to a decade low of 1,285.70 won to the greenback in mid-March, compared with 1,158.10 won on Jan. 20, the day South Korea reported its first confirmed case of COVID-19.

South Korea currently has bilateral currency swap arrangements with nine countries, including Canada, China and New Zealand, worth over $190 billion in total.
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