USD/KRW pick-up bids above 1, 200 after BOK set up 8 trillion won SPV fund

During early Friday, the Bank of Korea (BOK) came out with its announcements concerning the nature of the Special Purpose Vehicle (SPV).

The South Korean central bank said to provide up to 8 trillion won to the SPV for corporate bond purchases. The first round of which will be undertaken during the next week by the lending of 1.78 trillion won.

Details suggest that the BOK will buy corporate bonds and commercial papers in its first round. Additionally, the policymakers conveyed their preference for bond rating from A to BBB.

The central bank refrained from any actions during Thursday’s monetary policy meeting and said to hold another gathering to decide over the SPV.

Read: BOK’s Lee: Can consider normalizing rates only when economy heals from the virus outbreak

FX implications

Following the news, the USD/KRW started picking bids from 1,204, currently around 1.206, up 0.07% on a day, by the press time.