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Han Eun supplies the first ever unlimited liquidity… Korean version quantitative easing

2020-03-26T03:33:22.743Z

The Bank of Korea decided to provide unlimited liquidity to financial companies for three months from next month. This is a measure to alleviate the impact of the financial market caused by the Corona 19 crisis. Reporter Chan-Keun Park. The Bank of Korea today opened the Financial Monetary Committee and decided to supply liquidity by purchasing unlimited redemption obligations every week until June of this year.



<Anchor>

The Bank of Korea decided to provide unlimited liquidity to financial companies for three months from next month. This is a measure to alleviate the impact of the financial market caused by the Corona 19 crisis.

Reporter Chan-Keun Park.

<Reporter>

The Bank of Korea decided to supply liquidity by opening the Financial Monetary Committee today (26th) and purchasing weekly repurchase conditional bonds without any size limit until June.

[Yoon, Myun-Sik / Vice President of the Bank of Korea: Compared to the financial crisis, everyone will have a big impact. Monitor the current market situation with the best vigilance ... ]

A repurchase condition bond is a bond that a financial institution sells a bond on a condition that passes after a certain period of time, and then pays a fixed interest.

The Bank of Korea explained the background of this measure to support the government's financial stability program.

The Bank of Korea explained that unlimited liquidity support has not been implemented in the past during the foreign exchange crisis or the global financial crisis.

The Bank of Korea will issue a repurchase condition bond bid with a maturity of 91 days every Tuesday from the 2nd of the following month.

The bidding rate is 0.85% or less, adding 0.1% points to 0.75% of the base rate, and we decided to announce it every time we bid.

In order to facilitate liquidity supply, 11 securities companies were added to the financial companies participating in the redemption conditional bond bidding, and the target securities were expanded.

Daesang Securities also included bonds issued by public institutions such as KEPCO and Korea Expressway Corporation.

The Bank of Korea added that it is not wrong to interpret this liquidity supply as a quantitative easing.

Source: sbskr

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