BOK to extend special lending program amid pandemic

SEOUL, July 30 (Yonhap) -- The Bank of Korea (BOK) said Thursday it will extend a special loan scheme for local banks, brokerages and insurers by three months to help them fend off a possible funding squeeze and raise funds easily amid the new coronavirus outbreak.

In May, the BOK launched the 10 trillion-won (US$8.4 billion) lending program to allow banks, brokerages and insurers to take out loans from the central bank against collateral.

The BOK's monetary policy board decided to extend the special loan facility, originally set to expire on Aug. 3, by three months until Nov. 3.

It marked the first time that, excluding banks, the BOK has directly provided loans to brokerages and insurers.

The collateral is good corporate bonds, including ones rated AA-, which come to maturity within five years.

South Korea has taken a set of measures to minimize the economic fallout of the COVID-19 pandemic on the local financial system.

The steps include the BOK's "unlimited" purchase of local bonds in repo operations to boost market liquidity.

sooyeon@yna.co.kr
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