The Bank of Korea: "Expansion of RP Trading Targets Immediately After Martial Law, Ending on the 28th"

The financial market has remained generally stable recently
Scheduled termination without extension

The Bank of Korea announced on the 26th that it will end the temporary expansion of institutions and securities eligible for repurchase agreement (RP) transactions, which was implemented immediately after the emergency martial law situation, on the 28th.

Lee Chang-yong, Governor of the Bank of Korea, is speaking at a press conference on the interest rate decision of the Monetary Policy Committee held at the Bank of Korea in Jung-gu, Seoul on the 25th. 2025.02.25 Photo by Joint Press Corps

The Bank of Korea stated, "Considering that the financial market has recently shown a generally stable trend, we plan to end the measure as scheduled without extension." It added, "If it is deemed necessary in the future, such as when market anxiety spreads, we will continue to actively stabilize the market through RP purchases and simple purchases of government bonds."

The Bank of Korea supplies short-term won liquidity through RP purchases when the financial market becomes unstable due to domestic or external circumstances. It supplies liquidity by purchasing financial institution bonds and then recovers liquidity by reselling the bonds after a certain period.

Following the announcement of an unlimited liquidity supply policy on December 3 last year, when the emergency martial law situation occurred, the Bank of Korea announced the next morning that it would make irregular RP purchases and expand the eligible institutions and securities for transactions.