BOK to Buy Domestic Gold for First Time in 13 Years

The Bank of Korea (BOK) plans to purchase domestically produced gold for the first time in 13 years through over-the-counter transactions. The central bank has established a partnership with LS MnM Co., a copper smelting and refining company, the Korea Exchange (KRX), and the Korea Securities Depository (KSD). LS MnM is one of South Korea's two major gold producers, producing approximately 40 to 45 tons of gold annually as a byproduct of copper, brass, and zinc smelting.

The BOK will consider purchasing a portion of the gold that is not consumed domestically and is intended for export. The central bank will determine whether to proceed with the transaction after comprehensively considering domestic and international gold prices, its gold management plans, and market conditions.

The purchases will be made through large over-the-counter block transactions after prior consultations with the companies on price and quantity in order to minimize the impact on domestic gold prices. This new purchase channel can reduce foreign exchange risks compared with previous gold purchases in overseas markets, which were paid for in U.S. dollars.