Last Year, BOK Financial Institutions' Won Loan Balance 15.6 Trillion Won...10.5% Increase

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Last year, the balance of Korean won loans to financial institutions by the Bank of Korea reached 15.6 trillion won, an increase of 1.5 trillion won compared to the end of the previous year.

According to the Bank of Korea's '2019 Payment and Settlement Report' released on the 26th, the balance of financial intermediation support loans among Korean won loans was 15.6 trillion won, up 1.5 trillion won from the end of the previous year, representing an increase of about 10.5%.

The balance of financial intermediation support loans decreased from 17.2 trillion won in 2017 to 14.1 trillion won at the end of 2018, but increased again last year.

This year, the Bank of Korea's loans to financial institutions are expected to increase further. To mitigate the economic impact of the novel coronavirus infection (COVID-19), the Bank of Korea decided to lower the interest rate on financial intermediation support loans from 0.75% per annum to 0.25% per annum. The loan limit was also expanded by 5 trillion won, from the existing 25 trillion won to 30 trillion won.

Last year, the issuance volume of monetary stabilization bonds using the Bank of Korea's securities system was 142.1 trillion won, and the redemption volume was 149.7 trillion won. The issuance volume decreased by 11.1%, and the redemption volume decreased by 5.8%, respectively.

Issuance of government bonds increased by 4.4% year-on-year to 101.7 trillion won, while redemptions decreased by 25.8% year-on-year to 57.2 trillion won. The issuance amount of fiscal bonds rose sharply to 48.7 trillion won compared to 2 trillion won in 2018. However, the government fully redeemed the issued fiscal bonds.

The Bank of Korea's securities trading totaled 549 trillion won last year, down 9.4% from the previous year.

Regarding the government's fiscal policy, the Bank of Korea has established and operates the 'Bank of Korea Securities System' linked with the Bank of Korea Financial Network to carry out government bond and fiscal bond issuance operations. As the government's bank, the Bank of Korea collects national treasury funds such as taxes into government deposits and disburses them when the government requires. It also provides loans to the government when fiscal funds are temporarily insufficient.

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