The Bank of Korea (BOK) will deliver an additional $2 billion to local banks this week in its third injection of US banknotes under a bilateral currency swap arrangement with the US Federal Reserve aimed at preventing a foreign exchange liquidity crunch here, the bank said Tuesday.

The BOK held an online auction to provide up to $4 billion in seven-day debt and 84-day loans.

Bids undershot the BOK target of $3.5 billion in 84-day loans and $500 million in seven-day loans.

Successful bidders will receive dollars Friday, it said.

The South Korean central bank earlier delivered some $13 billion using its currency swap line with the US Fed, signed last month at the height of fluctuations in the local FX market.

The Korean won dropped to a decade low of 1,285.70 won per dollar in mid-March, compared with 1,158.10 won per dollar on Jan. 20, the day South Korea reported its first confirmed case of COVID-19.

The local currency closed at 1,217.90 won against the dollar Monday.

South Korea currently has bilateral currency swap arrangements with nine countries, including Canada, China and New Zealand, worth over $190 billion in total. (Yonhap)