BOK rolls out temporary foreign exchange relief measures as weak won persists

The Bank of Korea (BOK) will temporarily ease foreign currency-related regulations and offer incentives to financial institutions in a bid to stabilize the foreign exchange market, as the won continues to face downward pressure, the central bank said Friday. The average won-dollar exchange rate in December through Thursday stood at 1,472.2 won, the highest level since March 1998 during the Asian financial crisis, when it reached 1,488.87 won. The prolonged weakness of the domestic currency has heightened concerns over rising inflation and growing cost burdens for importers. Earlier in the day, the central bank's monetary policy board decided at an emergency meeting to temporarily waive the foreign exchange stability levy for financial institutions from January through June next year and to pay interest on foreign currency reserve requirements during the same period. The levy, imposed under the Foreign Exchange Transactions Act on institutions holding foreign currency liabilities above a certain threshold, raises borrowing costs. Its temporary suspension is expected to lower funding cost