IBK, Japanese Bank Agree on 600 Billion KRW Committed Line to Secure Foreign Currency Liquidity

[Asia Economy Reporter Kwon Haeyoung] IBK Industrial Bank of Korea announced on the 2nd that it has signed an increased and extended committed line contract worth approximately 600 billion KRW with Japan's Mitsubishi UFJ Financial Group (MUFG) Bank and Mizuho Bank.

A committed line is a right in transactions between financial institutions to receive foreign currency preferentially in emergencies. Within the agreed limit, each party can withdraw the counterparty's currency if necessary.

In 2018, IBK became the first domestic bank to establish a two-way committed line in both KRW and JPY with Japanese banks. Recently, to respond to the expanding domestic and international uncertainties such as the COVID-19 pandemic, it decided to increase the limit.

Under this contract, IBK increased the limit provided by each Japanese bank from 20 billion JPY to 30 billion JPY, and the KRW limit provided to the two banks from 200 billion KRW to 300 billion KRW each. The contract period is one year and can be extended annually upon mutual agreement at maturity.

An IBK official said, "This contract has laid the foundation to secure foreign currency more stably," adding, "We expect it will also help support export-import transactions of small and medium-sized enterprises."

This content was produced with the assistance of AI translation services.