FSS to help banks increase their foreign currency assets

Korean banks will need to set aside more foreign-currency deposits this year to be in step with government guidelines, the financial watchdog said yesterday.

The Financial Supervisory Service (FSS) plans to induce local lenders to secure ample foreign liquidity through letting them diversify their foreign borrowing, which includes reducing their short-term debts by shifting their financing to more long-term bond sales, the regulator said.

According to FSS estimates, 18 banks are expected to increase their total foreign currency-based assets by 5.3 percent in 2012 from the previous year.

The target growth rate is similar to the country’s nominal economic growth rate of 5.3 percent and an export growth estimate of 5.5 percent, the FSS said.

Yonhap