Reuters: Bank of Korea plans to provide dollars to financial firms via repo operations

South Korea’s central bank said on Tuesday it plans to provide dollar funds to local financial firms via repurchase agreements to stabilise the foreign exchange market if volatility rises due to the coronavirus pandemic and global economic recession risks.

The central banksaid it plans to accept U.S. Treasuries for repo deals, adding it could consider accepting other foreign-currency bonds if needed.

“The Bank of Korea will directly use foreign exchange reserves to purchase foreign-currency bonds held by local financial firms … under repo operations to provide U.S. dollar funds,” it said in a statement.

The move would not affect the amount of foreign exchange reserves held by South Korea, the central bank said.

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