SEOUL, March 9 (Yonhap) — South Korea’s financial regulator said Tuesday it has decided to extend the duration of eased liquidity rules for banks by another six months to ensure financial institutions can provide funds to companies amid the coronavirus pandemic.
In April last year, the Financial Services Commission lowered the foreign exchange liquidity coverage ratio (LCR) for banks to 70 percent from 80 percent.
The move helped stabilize the currency market roiled by the COVID-19 pandemic and provide liquidity to companies.
The eased liquidity rules had been scheduled to end in March, but the commission will extend the scheme to until the end of September.
Local financial institutions have been required to hold an adequate amount of foreign currency assets to get over short-term liquidity disruptions.
The foreign exchange LCR is measured as high-quality liquid foreign assets to projected net cash outflows over 30 days.
South Korea has taken a series of steps to stem market turmoil and provide a buffer against the fallout from the COVID-19 outbreak.