The Bank of Korea Conducts RP Purchase on the 7th... Additional 3.5 Trillion Won Supplied to Financial Sector

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The Bank of Korea announced on the 7th that it received bids totaling 3.46 trillion won in a repurchase agreement (RP) purchase auction conducted for banks and securities companies. The Bank of Korea decided to supply the full amount of the bids.

An RP refers to a bond sold with the condition that it will be repurchased by the buyer after a certain period. The Bank of Korea uses RP transactions when injecting money into or withdrawing money from the market. When the Bank of Korea buys RPs from financial companies, it has the effect of releasing that amount of cash into the market.

The maturity of the RPs purchased by the Bank of Korea on this day is 91 days. The Bank of Korea also conducted an RP purchase on the 2nd, supplying 5.25 trillion won. It is known that securities companies, which had recently been suffering from short-term liquidity shortages, accounted for most of the first RP purchase.

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