The Bank of Korea Extends Special Financial Stability Loan Program by 3 Months
The Financial Stability Special Loan Program Extended for 3 Months by the Monetary Policy Committee
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[Asia Economy Reporter Jang Sehee] The Monetary Policy Committee of the Bank of Korea announced on the 30th that it will extend the "Financial Stability Special Lending Facility," which includes securities and insurance companies, for three months. The operation period is extended from the original August 3 to November 3.
The Financial Stability Special Lending Facility is a standby credit system that allows borrowing from the Bank of Korea at any time when eligible corporate bonds are provided as collateral. It serves as a safety measure in preparation for emergencies where general companies and financial institutions face significant difficulties in raising funds.
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The total loan limit is 10 trillion won, and the loan interest rate is applied by adding 0.85 percentage points to the Monetary Stabilization Bond (182 days) rate. The loan period is within six months. Additionally, the loan collateral consists of high-grade (AA- or higher) corporate bonds issued by general companies with a remaining maturity of up to five years.
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