South Korea's central bank said on Tuesday it extended loans worth US$1.2 billion to local banks in a bid to help them secure foreign currency liquidity.

According to the Bank of Korea (BOK), it tapped the money of a US$30 billion currency swap line with the US Federal Reserve, auctioning it off to eight local lenders.

The 84-day loans were given out at an average interest rate of some 0.9 percent, the BOK added.

Between December-January, the central bank extended a total of US$16.35 billion to the banking sector as lenders went through foreign liquidity squeeze amid a financial slump.

(Xinhua News Agency August 11, 2009)