Central Bank to Supply ‘Unlimited’ Liquidity to Stabilize Financial Markets l KBS WORLD Radio

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Central Bank to Supply 'Unlimited' Liquidity to Stabilize Financial Markets

Photo : YONHAP News

The Bank of Korea will be supplying “unlimited” liquidity to financial companies over the next three months.

The bank’s Monetary Policy Board announced Thursday that it had decided to conduct weekly repo auctions to supply an unlimited amount of liquidity to markets from April to June.

The bank explained that the unprecedented move aims to stabilize financial markets and support government programs to assist individuals and banks. It explained that that the move differs little from the so-called “quantitative easing” measures being undertaken by central banks in the United States and elsewhere.

During the repo auctions, to be held every Tuesday, financial institutions that can deposit government debt as collateral can borrow money at an interest rate of no higher than 0.85 percent.

The Bank of Korea added it would decide whether to extend the auctions through July and beyond after examining the market situation and the results of the auctions.

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