Special Report: Global Financial Crisis

    SEOUL, April 13 (Xinhua) -- South Korea's central bank is to offer 2 billion U.S. dollars to local banks this week, less than its previous supply amount, the central bank said Monday.

    According to the Bank of Korea (BOK), it will offer 2 billion U.S. dollars to local banks through 84-day swap deals on Tuesday out of its 3 billion-U.S. dollar loan extension, which would expire this Thursday.

    The money is tapped from a 30 billion-U.S. dollar currency swap agreement with the U.S. Federal Reserve, the BOK said.

    If local lenders take the full amount, the total value of the swap line tapped by the BOK would be reduced to 14 billion U.S. dollars from the current 15 billion U.S. dollars, it said.

    The move comes as the country's trade balance and foreign currency conditions are making progress, with local banks and companies striving to borrow from overseas, according to the BOK.

    Since last March, the central bank has been cutting its dollar supply to local banks as foreign currency market shows improvement.

    South Korea's foreign exchange reserves made an advance to 206.34 billion U.S. dollars as of end-March, gaining the largest monthly amount in two years.

    Holding the sixth-largest amount of foreign currency reserves in the world, the nation also seeks for expanding its existing swap lines with China and Japan to 30 billion U.S. dollars each.