The Bank of Korea(BOK) has decided to ease regulations and provide incentives for financial institutions in a bid to stabilize the foreign exchange market. 

The central bank decided on Friday, during a meeting of its Monetary Policy Board, to temporarily waive the FX stability levy from January to June of next year. 

Under the Foreign Exchange Transactions Act, financial institutions must pay an FX stability levy when they hold foreign-currency debt above a certain threshold.

Waiving the levy will make it cheaper to borrow foreign currency, including the U.S. dollar.

The BOK will also pay interest on mandated FX reserves to ease liquidity risk.