SEOUL, July 7 (Yonhap) -- The government borrowed over 91 trillion won (US$65.8 billion) from the Bank of Korea (BOK) in temporary loans in the first half of the year to fill its fiscal shortfall, data showed Sunday.
According to the BOK data submitted to Rep. Yang Boo-nam of the main opposition Democratic Party, the total amount of the government's temporary loans from the central bank during the January-June period came to 91.6 trillion won.
Compared with the same period in previous years, it marked the largest amount of loans since 2011, when such statistics have been recorded. Of those, the government has repaid 71.7 trillion won.
It exceeds last year's figure by 4.4 trillion won and by 8 trillion won compared to the same period in 2020, when the nation saw a sudden spike in spending due to the outbreak of COVID-19.
Security workers move bundles of cash at the Bank of Korea in Seoul on Feb. 5, 2024, as the central bank supplies funds to commercial banks. (Pool photo) (Yonhap)
Similar to an overdraft account for private individuals with commercial banks, the BOK's temporary loan system for the government is utilized to address temporary funding shortages.
Observers say that the government's frequent borrowing from the BOK in temporary loans can lead to an increase in liquidity circulation and hinder policy efforts to curb inflation.
Reliance on easy borrowing from the central bank, rather than issuing treasury securities, to cover revenue shortfalls could also make it difficult for the National Assembly and the public to understand the government's financial situation.
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