CHRONOLOGY-South Korea reveals steps to stabilise market
Oct 19 (Reuters) - South Korea said on Sunday it would provide $30 billion liquidity to domestic banks and exporters and offer government guarantee on banks' foreign exchange dealings in a part of package aimed at stabilising financial markets.
The north Asian country said it was not considering injecting public funds to recapitalise domestic banks for now but may take such steps and expand deposit guarantees if necessary.
The following is a chronology of key measures South Korea has taken to confront recent market turmoil:
- Oct. 19: The country's top three financial authorities jointly announce measures to calm markets, including a plan to provide government guarantee on foreign-currency borrowings.
- Oct. 17: The Bank of Korea says it will hold an auction every Tuesday from Oct. 21 to supply dollars through dollar/won swap deals to a larger number of commercial banks to ease dollar shortages [ID:nSEO264901]
- Oct. 17: State-run National Pension Service says it will buy bonds issued by commercial banks and local companies to ease a deepening credit crunch.
- Oct. 15: The Bank of Korea says it will buy $10 billion worth of U.S. treasuries by the end of this year from the state-run pension service to rebuild steadily falling foreign exchange reserves. [ID:nSEO240387]
- Oct. 10: The won KRW= ends local trade up about 5.5 percent against the dollar on reported intervention and dollar sales by local exporters, after showing its biggest intraday swing since the Asian financial crisis 11 years ago.
- Oct. 10: The Financial Services Commission says it will require all banks to submit their foreign exchange trading records to curb speculative trading and stop the won's rapid decline against the dollar.
- Oct. 9: The won hits its lowest since the Asian financial crisis against the dollar but rebounds on reported dollar-selling intervention by the authorities.
- Oct. 9: Finance Minister Kang Man-soo asks major exporters to offload their dollar holdings and help the foreign exchange market stabilise. Since then, steelmaker POSCO (005490.KS), Hyundai Motor (005380.KS) and Samsung Electronics (005930.KS) sell hundreds of millions of dollars. [ID:nSEO91472]
- Oct. 9: The Bank of Korea cuts its main interest rate by 25 basis points to 5.00 percent from a 7-1/2-year high of 5.25 percent, joining a round of worldwide rate cuts aimed at tackling global financial market turmoil. [ID:nSEO278751]
- Oct. 9: The Finance Ministry says it will offer 800 billion won ($600 million) in a financial support package to small and medium-sized companies by providing insurance on sales receivables and loans. [ID:nSEO898181]
- Oct. 6: The Finance Ministry says it will inject $5 billion to domestic banks and cash-strapped exporters through the state-run Export-Import Bank of Korea.
- Oct. 2: The Bank of Korea says it has $240 billion in foreign exchange reserves, the world's sixth largest, as of end-September. But the reserves have steadily fallen for the past six months as the authorities spend billions of dollars propping up weakening won currency. [ID:nSEO334149]
- Sept. 30: South Korea bans short-selling of all listed stocks and allows companies traded on the main exchange to buy back 10 times more of their own shares from the market from October [ID:nSEO281652].
- Sept. 26: The Finance Ministry says it will inject $10 billion into the local currency swap market until the middle of October to help domestic banks stave off persistent dollar funding shortages [ID:nSEV000504]. (Reporting by Miyoung Kim and Kim Yeon-hee; Editing by Tomasz Janowski)
