Seoul: South Korea's central bank bought a record amount of repurchase agreements last year as part of efforts to inject liquidity into the market amid economic difficulties and a political crisis caused by President Yoon Suk Yeol's martial law declaration, data showed Monday.
According to Yonhap News Agency, the Bank of Korea (BOK) injected 106.1 trillion won (US$72.13 billion) through the repo buying scheme in 2024, marking the largest yearly figure ever. This data was compiled by the central bank and submitted to Rep. Chung Il-young of the main opposition Democratic Party (DP).
Of the total amount, repo operations worth 47.6 trillion won were conducted in December. This move came after financial authorities pledged to provide "unlimited liquidity" to the market to mitigate the impact of Yoon's unexpected, though brief, martial law imposition on December 3.
The December figure surpassed the total for the entire year of 2020, which stood at 42.3 trillion won when the country was grappling with the COVID-19 pandemic. "The data indicated that the martial law incident had greater repercussions for the financial market than the pandemic," the lawmaker stated, urging the central bank to maintain efforts to ensure market stability.
Following the martial law declaration, the Korean currency fell to around 1,450 won against the U.S. dollar, marking its lowest point in nearly 16 years, and it has remained well below this level since.
A repurchase agreement involves one party selling a security to another at a specified price, with a commitment to repurchase it later. The BOK engages in buying repos to offer liquidity and stabilize the market.
The National Assembly has voted to impeach Yoon, with a final decision pending from the Constitutional Court, and a comprehensive investigation into the matter is ongoing.