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Currency Swap Fund to Be Supplied to Foreign Exchnge Market This Week
Tender for Foreign Currency Loans Slated for March 31
Currency Swap Fund to Be Supplied to Foreign Exchnge Market This Week
  • By Jung Suk-yee
  • March 30, 2020, 08:56
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The Bank of Korea will supply one-fifth of the US$60 billion fund prepared through the currency swap agreement with the United States to the foreign exchange market this week.

The Bank of Korea announced on March 29 that one-fifth of the US$60 billion fund prepared based on the currency swap agreement with the United States would be supplied to the foreign exchange market this week.

Specifically, a competitive bid for foreign currency loans will be conducted on March 31 and actual money supply to financial companies is scheduled for April 2. Five-sixths of the money to be supplied matures on June 25 and the rest matures on April 9.

The minimum bid amount is US$1 million and the maximum is US$1.5 billion and US$300 million for those maturing on June 25 and April 9, respectively. The minimum bid rate, which is 0.25 percentage point plus the overnight index swap rate, is scheduled to be announced on March 30. The overnight index swap rate, which corresponds to the call rate in South Korea, is a one-day rate applied to American financial institutions.

Every bank wishing to take out the U.S. dollar loan must provide a collateral equivalent to 110 percent of its total borrowing amount. The collateral can be a government bond, a government-guaranteed bond, a monetary stabilization bond, a bank bond, a special public enterprise bond, and the won cash.