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S.Korea to extend loosened liquidity coverage rules for local banks

SEOUL, Aug 26 (Reuters) - South Korea’s financial regulator said on Wednesday it will extend loosened liquidity requirements for local banks including the foreign exchange liquidity coverage ratio through March 2021.

The Financial Services Commission said the extensions were meant to address any potential funding stress that may arise in times of volatility.

The regulator said in March the FX LCR will be relaxed to 70% from 80% temporarily, meaning banks will be required to hold less foreign assets that can readily be converted into cash in times of stress.

Reporting by Cynthia Kim, Joori Roh; Editing by Andrew Heavens

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