South Korea may extend eased liquidity rules for banks: report

The foreign exchange liquidity rules are eased until September.

South Korea is likely to extend its eased liquidity rules for banks for another six months, reports Yonhap News Agency, based on industry sources.

In April, the country eased foreign exchange liquidity rules through September to prod local financial firms to provide more dollars in the currency market roiled by market turbulence.

Under the eased rules, the foreign exchange liquidity coverage ratio (LCR) for banks was set at at least 70%.

The FX LCR is measured as high-quality liquid foreign assets to projected net cash outflows over 30 days.

Local financial institutions have been required to hold an adequate amount of foreign currency assets on hand to get over short-term liquidity disruptions.

But a recent surge in new virus cases here, coupled with volatile financial markets, is still posing a risk to financial companies, according to the sources.