Policy responses to dislocations in the FX swap market: the experience of Korea

Naohiko Baba and Ilhyock Shim

BIS Quarterly Review, 2010

Abstract: During the financial crisis, Korea responded to dislocations in the FX swap market by both drawing on its swap line with the Federal Reserve and using its own international reserves to provide dollars to domestic banks. We show that the Bank of Korea's use of the Fed swap line was very effective in alleviating dislocations in the won/dollar FX swap market, whereas the provision of funds using its own foreign reserves was not.

JEL-codes: G12 G13 G18 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (29)

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