The Bank of Korea and the government will temporarily exempt foreign exchange soundness levy payments for six months and implement interest payments on excess foreign currency reserve deposits, aiming to stabilize the foreign exchange market and improve supply and demand conditions.
According to the Bank of Korea on December 19, the government plans to temporarily exempt financial institutions from the foreign exchange soundness levy for six months. The exemption is tentatively scheduled to cover the period from January to June next year. Through this measure, the government and the Bank of Korea expect to ease the burden of levy payments for domestic financial institutions, thereby facilitating a smoother supply of foreign currency in the domestic market.
The Bank of Korea will also pay interest for six months on excess foreign currency reserve deposits held by financial institutions at the central bank. The interest payment will apply to the period from January to June next year, with monthly payments based on reserve accumulation from December this year through May next year.
An official from the Bank of Korea stated, "Financial institutions will be able to operate foreign currency funds, which were mainly managed overseas, domestically with stable interest income as a hedge against risks." The official added, "By expanding short-term foreign currency investment options for financial institutions, we also expect to encourage the inflow of foreign currency deposits currently managed overseas by non-financial institutions and individuals into the domestic market."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
