Seoul, March 26 (IANS) South Korea’s central bank on Thursday decided to provide “unlimited” liquidity to financial institutions for the next three months to help minimize the economic fallout from the coronavirus pandemic.
In a statement, the Bank of Korea (BOK) said that an open bidding will be held once a week by the end of June to offer liquidity to financial institutions “with no limit” through the repurchase agreement (RP) transactions, reports Xinhua news agency.
The first bid is scheduled for April 2.
Through the 91-day RP transactions, the BOK will lend money to financial institutions for 91 days with certain bonds as collateral.
Financial institutions and bonds subject to the open market operations were also expanded.
It would be the first time that the central bank has provided an unlimited amount of liquidity, according to the BOK.
The unlimited liquidity supply was aimed to help stabilize volatile financial markets and minimize the negative effect from the pandemic, while supporting the government’s stimulus package.
The government announced 50 trillion won ($40 billion) worth of emergency stimulus package last week for local businesses and financial markets, doubling it to 100 trillion won ($80 billion) earlier this week.
The number of confirmed coronavirus cases in South Korea as of Thursday stood at 9,241 with 131 deaths.