Bank Of Korea Joins Aid Effort
2008年11月25日
The Bank of Korea will contribute as much as five trillion won ($3.34 billion) to a government-led effort to thaw the nation's frozen debt market, but analysts said the initiative won't be enough to restore calm.
The South Korean central bank said Monday that it won't invest directly in the planned fund but will use its cash to buy Korean treasury bonds and other assets from local banks and other financial firms to help them contribute to the 10 trillion won stabilization package.
'The liquidity support for the fund is aimed at helping to smooth liquidity flow in the corporate bond and commercial paper' markets, said Lee Ju-yeol, a deputy governor at the central bank.
The fund should help bring down money-market rates, easing the credit crunch confronting Korean companies, Mr. Lee said.
The fund is to be collected from banks, insurers, brokerages and pension funds. State-run Korea Development Bank has said it will provide 20% of the total. The launch date for the fund and further details on participation are expected to be announced in coming weeks.
The central bank is to buy treasury bonds and buy back currency-stabilization bonds before maturity, as well as buying bonds through its repurchase operations in the money market. The Bank of Korea isn't planning to buy commercial paper.
The central bank's participation in the proposed fund is the latest move by authorities to halt the damage being done to South Korea's financial markets and economy.
In addition to slashing interest rates, the central bank has been buying bank bonds through its open-market operations to help bring down interest rates.
Korea's foreign-exchange authorities recently agreed with China and Japan to expand currency-swap lines in a bid to secure more dollar liquidity, following a $30 billion swap line with the U.S.
Jung-Ah Lee |
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