Gov't to temporarily suspend FX stabilization fee until June to boost supplies
This photo shows a dealing room of Woori Bank in Seoul, Tuesday. Yonhap
Banks and other financial institutions will be temporarily exempt from the foreign exchange stability levy until June as part of government efforts to boost the supply of U.S. dollars, the budget ministry said Wednesday.
Under the six-month measure, financial institutions will not be required to pay the special levy, according to the Ministry of Planning and Budget. The exemption will be applied retroactively from the beginning of January.
The system requires financial institutions to pay a levy when they hold foreign currency liabilities above a certain level.
Exempting the levy is expected to reduce the cost of foreign currency borrowing and increase the supply of dollars in the foreign exchange market
The measures come amid the continued depreciation of the Korean won against the U.S. dollar. The local currency was trading at 1,470.3 won per dollar as of 3 p.m., up 9.5 won from the previous session.