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(Seoul=Yonhap Infomax) Hye Rim Pi – South Korea's short-term money market is expected to face a reserve shortfall on the 25th.
On this day, reserve balances are set to increase due to fiscal disbursements of 700 billion won ($591 million), Gongja Fund inflows of 2.8 trillion won ($2.36 billion), monetary stabilization bond maturities of 740 billion won ($624 million), and maturity of 500 billion won ($423 million) in liquidity adjustment deposits.
Conversely, reserve balances will decrease due to tax receipts of 800 billion won ($676 million), maturity of 20 trillion won ($16.89 billion) in Bank of Korea repurchase agreements (RPs), 2.8 trillion won ($2.36 billion) in government bond payments, issuance of 1 trillion won ($845 million) in monetary stabilization bonds, and 500 billion won ($423 million) in liquidity adjustment deposits.
A market participant commented on the call market, stating, "With the maturity of Bank of Korea RP purchases, reserves are expected to be in deficit for the day," adding, "Some banks may seek call borrowings, but funding rates will vary depending on the level of repo surplus."
Regarding repos, the participant noted, "With liquidity levels largely unchanged and new subscriptions coming in, the general bond market sentiment will depend on the scale of these inflows," and added, "Credit bonds remain notably tight."
On the previous trading day, fiscal disbursements of 3.4 trillion won ($2.87 billion) and maturity of 500 billion won ($423 million) in liquidity adjustment deposits contributed to an increase in reserves.
Meanwhile, tax receipts of 3.1 trillion won ($2.62 billion) and 500 billion won ($423 million) in liquidity adjustment deposits led to a decrease in reserves.
As a result, the previous day's reserve surplus stood at 13.0464 trillion won ($11.01 billion), with the cumulative reserve surplus at 58.0048 trillion won ($48.97 billion).
The overnight call rate was recorded at 2.519%, with a trading volume of 14.9517 trillion won ($12.62 billion).
(※The cumulative reserve balance refers to the total amount of reserves that banks have in excess or shortfall over a given period. It is the sum of daily reserve balances. If actual reserves exceed required reserves, a surplus is recorded; if they fall short, a deficit is noted. A large surplus indicates ample liquidity in the market, while a growing deficit signals tightening conditions.)
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