BOK auctions off US$3.35 bln to local banks

SEOUL, Dec. 22 (Yonhap) -- South Korea's central bank said Monday it auctioned
off US$3.35 billion to local banks which have been suffering from a dollar
liquidity crunch in the wake of the U.S.-sparked global financial turmoil.

The Bank of Korea (BOK) said the money is part of a $30 billion currency swap
agreement which it signed with the U.S. Federal Reserve in late October. The BOK
has tapped $7 billion from the facility so far.
According to the BOK, nine financial institutions participated in the auction,
bidding for a combined $3.35 billion on offer. The loans have an average annual
interest rate of 2.36 percent and will mature in 86 days.
The move came as the country's foreign exchange reserves, the world's
sixth-largest, have been on the decline mainly due to liquidity injections
designed to ease an ongoing credit crunch and financial jitters.
The foreign reserves totaled $200.51 billion as of end-November, marking the
eighth straight month of decline. South Korea also reached new currency swap
arrangements with China and Japan in late December, expanding its existing swap
lines with the two countries to $30 billion each.
sooyeon@yna.co.kr
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