South Korea said Wednesday it will raise the cap on bank's currency forward positions to inject more dollars into the currency market, the latest follow-up to the market stabilization measures.

The cap for local banks will be revised up to 50 percent from the previous 40 percent, with that for foreign banks operating in the country to be set at 250 percent, up from the previous 200 percent, according to the Ministry of Economy and Finance.

The measure will take effect Thursday, the ministry said.

In 2010, the financial authorities introduced the cap, requiring banks to maintain their currency forward positions.

In the previous session, the South Korean won closed at 1,243.5 won, the lowest in a decade, amid a growing market rout sparked by the spread of the new coronavirus.

"The measures will help stabilize the currency swap market by inducing more foreign funds," Finance Minister Hong Nam-ki said in a meeting with other economy-related ministers. (Yonhap)