12 hours ago
BOK Overhauls Repo Framework Amid Changing Liquidity Conditions
The Bank of Korea said it's revamping its open market operation framework to increase its operational flexibility to manage liquidity, stabilize short-term rates, and respond during periods of financial stress.
Starting July 10, the central bank will conduct both buying and selling of repurchase agreements, or repos on fixed days, shifting away from a model focused largely on liquidity absorption through sales. It will offer 14-day repo purchases on Tuesdays to better manage short-term funding mismatches. Currently BOK offers 7-day repo sales every Thursdays and conducts repo purchases on an ad-hoc basis.
