Wednesday, December 7

S.Korea’s loosens collateral policies to ease bond market jitters

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SEOUL, Oct 27 (Reuters) –

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South Korea’s central bank on Thursday said it will loosen collateral policies for local financial institutions applying for loans from the Bank of Korea to mitigate the tightening of financial conditions in the short-term money markets.

The BOK will start accepting collaterals including bank debentures and some debt issued by state-run enterprises for three months starting on Nov. 1.

The bank will also open a temporary repurchase agreement facility worth about 6 trillion won ($4.24 billion) for local financial institutions to support the smooth functioning of financial markets.

The measures announced on Thursday come after the government on Sunday announced plans to

expand liquidity

supply programs worth about 50 trillion won ($35.31 billion) as part of efforts to calm corporate bond market jitters.

Separately, the nation’s financial regulator also said the loan-to-deposit ratio rules on local banks will be eased for six months. ($1 = 1,415.8500 won) (Reporting by Cynthia Kim; Editing by Christian Schmollinger)