March 17, 2020 / 10:58 PM / 23 days ago

S.Korea to loosen cap on banks' currency forward positions to ease dollar shortage

SEOUL, March 18 (Reuters) - South Korea on Wednesday said it will loosen restrictions on currency forward positions for banks to encourage financial institutions to supply more dollars as the coronavirus pandemic sends shock waves through global markets.

The cap on the foreign currency forward positions that local banks can hold will be raised to 50% from the current 40% starting March 19, the finance ministry and the Bank of Korea said in a statement.

For foreign banks the same ceiling will be raised to 250% from the current 200%. (Reporting by Cynthia Kim; Editing by Sandra Maler)

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