SEOUL, January 13 (AJP) - The Bank of Korea (BOK) injected 47.6 trillion won ($32.3 billion) in repurchase agreements (RPs) last December, a liquidity infusion surpassing its total pandemic-era support.
RPs, the central bank’s monetary policy toolkit, are used to supply short-term liquidity to financial institutions by purchasing bonds with agreements to resell them at a later date.
This intervention in December brought the BOK’s RP purchases for 2024 to an unprecedented 106.1 trillion won. Of this, 58.5 trillion won had already been deployed between January and November, according to the central bank, Monday.
The scale of the December liquidity injection eclipsed the bank’s total RP purchases during the height of the COVID-19 pandemic in 2020, which amounted to 42.3 trillion won.
The extraordinary measures followed President Yoon Suk Yeol’s declaration of martial law on Dec. 3. Hours after the announcement, BOK Governor Rhee Chang-yong committed to providing unlimited liquidity support, initiating an emergency RP purchase program the next morning.
In December, the average daily balance of RPs surged to 14.9 trillion won, exceeding the previous peak of 14 trillion won recorded in June 2020.
"The BOK's actions clearly indicate that the economic disruption caused by the insurgency has surpassed that of the COVID-19 pandemic," said Chung Il-youmg, a member of the opposition Democratic Party.
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