BOK lends $2.1b more to banks via US currency swap

The Bank of Korea (BOK) delivered an additional $2.12 billion to local banks Tuesday under a currency swap deal with its US 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.

"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 US 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.

The local currency finished at 1,229.70 won on Tuesday, down 9.2 won from the previous session, after CNN reported that North Korean leader Kim Jong-un is "in grave danger after a surgery." South Korean officials said they have seen no unusual signs with regard to Kim's health.

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