Chairperson Kim Byeong-hwan requested banks to consider adjusting the foreign currency payments and foreign currency loan maturities of corporations flexibly in light of the recent volatility in the foreign exchange market.
On the morning of the 19th, Chairperson Kim attended a corporate finance situation review meeting at the Korea Federation of Banks in Jung-gu, Seoul, where he made this request to the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) along with Korea Development Bank, Export-Import Bank of Korea, and Industrial Bank of Korea.
If a corporation opens an import letter of credit to procure materials and supplies, the opening bank pays the exporter (bank) first, and the corporation incurs a payment obligation to the bank after a certain period. Accordingly, the Financial Services Commission explained that when the payment date arrives, there is a demand for foreign currency purchases due to the payment obligation.
The financial authorities stated that if the foreign currency payments and foreign currency loan maturities are adjusted, corporations will no longer need to secure foreign currency at the higher exchange rates at year-end, reducing their burden and contributing to easing the supply and demand pressure in the foreign exchange market and stabilizing the exchange rate.