World News

Bank of Korea to prepare for emergency situations, review further measures to stabilise bond market

SEOUL (Reuters) – South Korea’s central bank chief said on Thursday the bank needs to prepare for emergency situations as it cannot rule out credit crunch risks in local financial markets given uncertainties in global financial markets amid the spread of the coronavirus.

“If the (bond market) situation worsens, the Bank of Korea (BOK) could also review lending money to non-bank financial institutions to stabilise the corporate bond market,” BOK Governor Lee Ju-yeol said in a statement.

Lee’s remarks came hours after the bank accepted 5.25 trillion Korean won ($4.28 billion) in bids from financial institutions for 91-day repurchase agreements at a rate of 0.78%, a move intended to calm money markets hammered by the coronavirus pandemic.

(Reporting by Joori Roh; editing by Jason Neely)