Korea plans massive W50tr injection to resuscitate virus-hit economy

  • South Korea
  • Thursday, 19 Mar 2020

President Moon Jae-in speaks at the economy meeting on Thursday. Yonhap

SEOUL, March 19 (The Korea Herald/ANN) -- South Korea is planning a series of measures amounting to W50tr to save its virus-hit economy.

Deadlines on corporate loans will be extended, and a fund to stabilize the country’s stock markets will be established as part of Seoul’s efforts to deal with the economic impact of the COVID-19 outbreak.

Under the measures, the deadline for loans taken out by small and medium-sized enterprises and small merchants will be extended by more than six months. In addition, debtors will also be given a six-month extension on paying interest payments.

According to the government, the measures -- including 1.5 percent low-interest loans for small businesses -- amount to a total of 50 trillion won.

According to the presidential office and financial authorities, these and other measures were decided at the first emergency economy conference held Thursday.

“As the first measure to resolve financial uncertainties, and to prevent bankruptcies of SMEs, merchants and the self-employed, an emergency financial measures worth 50 trillion won is decided, ” President Moon Jae-in said at the first emergency economy meeting held Thursday.

He said that all resources available to the government have been mobilized for the measures, and that the measures are focused on easing liquidity problems experienced by smaller companies and small merchants.

At the meeting, Moon once again stressed the importance of the speed with which government aid is rolled out, urging officials to take steps to ease regulations to facilitate the injection of funds into the market.

Following the meeting, the financial authorities announced a number of measures including plans for establishing funds to stabilize the markets.

“In order so that excessive anxiety in the stock market does not contract the real economy, a fund for stabilizing the financial markets raised by the financial industry will be established, ” Minister of Economy and Finance Hong Nam-ki said.

He said that the fund will be in place until the markets recover, and that it will be used to in ways that promotes stabilization of the markets.

Hong also said that a separate fund with the aim of stabilizing the bond market will also be set up. According to Hong, the bond market stabilization fund will be established with input from banks, security and insurance companies.

Regarding the possibility of another supplementary budget, Hong said that the matter will be discussed in the process of discussing responses to the COVID-19 outbreak’s economic fallout.

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