BOK buys repos to inject liquidity into market
SEOUL, Nov. 21 (Yonhap) -- South Korea's central bank said Monday it has bought repurchase agreements (repos) as part of efforts to inject liquidity into the market.
The Bank of Korea (BOK) bought 2.5 trillion won (US$1.84 billion) worth of repos early in the day in line with a decision to inject about 6 trillion won through such buying schemes on Oct. 27, according to the central bank.
Repos are mostly used to raise short-term capital, and the BOK usually sells them to absorb liquidity from the market as part of open market operations.
Monday's repo buying is intended to pump liquidity into the short-term money market.
South Korea's capital market, especially the corporate bond market, has been roiled in the wake of a recent Legoland-linked debt default and growing worries over a credit crunch.
Those developments have added to woes for businesses struggling to secure funds amid fast-rising borrowing costs driven by the BOK's steep rate hikes to combat inflation in line with global monetary tightening.
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