The Bank of Korea (BOK) said Friday that it will place a restriction on the use of foreign currency loans by companies and individuals, beginning next week, in a move to curb the won’s appreciation and rising short-term foreign borrowings. The central bank plans to require local lenders dealing with foreign currencies not to extend foreign currency-denominated loans to those who convert foreign money into the won or use loans for purposes that are not stated previously. Such foreign currency loans are blamed for the increase in the supply of dollars in the local foreign exchange market and further hike the won’s value. Under the measure, banks and other financial services companies will only be able to extend foreign currency loans if borrowers use loans to meet financial needs abroad, such as payments for overseas projects and imports of goods. A BOK official said the central bank has asked banks to extend foreign currency loans only to those who use the money for business over the past year. read more
[Tags]foreign, loans, currency, banks, won, bank, forex news[/Tags]
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