IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 13 Jun 2010 | Removal date: open ended
Still in force

Controls on commercial transactions and investment instruments

On 13 June 2010, the Republic of Korea introduced macro-prudential measures to mitigate the volatility of capital flows. The three specific measures are:

  • Introducing new ceilings on banks' foreign exchange derivative positions: 50% of domestic banks' capital, and 250% of foreign bank branches' capital;
  • Reinforcing the regulations on the use of foreign currency bank loans: foreign currency loans granted by financial institutions to residents can henceforth only be used for overseas purposes;
  • Improving foreign exchange soundness of financial institutions: tighter regulations on liquidity ratio and mid- to long-term financing ratio in foreign loan portfolios.

The asymettric treatment of domestic and foreign banks accounts for its classification of red in the GTA database.

AFFECTED COUNTRIES

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