SEOUL– South Korea’s financial regulators on Thursday said they will temporarily ease the loan-deposit ratio requirement on corporate loans for six months to add liquidity into the financial markets.
The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) said the loan-to-deposit ratio (LDR) ceiling for corporate loans will be raised from 100 percent to 105 percent for first-tier banks and to 110 percent for savings banks.
The eased regulation is expected to go into effect within this month. Regulators said the temporary easing could be extended depending on the market conditions.
Regulators hope the measure will help curb volatility in the local debt market currently roiled by rising interest rates.
South Korea’s central bank has raised its policy rate by a combined 2.5 percent since August last year to tame the rising inflation pressure.
Source: Yonhap News Agency