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South Korea's central bank says it plans to limit lending in foreign currencies. The move comes as part of regulations aimed at reducing the country's dependence on short-term foreign debt, and making it less prone to sharp reversals in capital flows.
Under the new rules, financial institutions will be allowed to extend foreign currency loans to domestic companies only if they are linked to payments for overseas transactions. The new rules will come into force in July.
The central bank says demand for foreign currency loans could rise, driven by companies seeking to finance investments at home with overseas borrowing. It says it's important to prevent a sharp rise in foreign debt.