SEOUL - SOUTH Korea's central bank is likely to inject up to 3.3 billion dollars (S$5.04 billion) into a state fund aimed at easing a credit squeeze in the country's debt market, a report said on Sunday.
S.Korea has more room for fiscal, monetary options
SEOUL - SOUTH Korea has greater room to manoeuvre with its monetary and fiscal policy than other countries, a government official said on Sunday following a meeting of top officials and the central bank chief.
Mr Cho Won-dong, deputy minister for national agenda at the prime minister's office declined to comment when asked if his comments suggested the government supports further rate cuts by the Bank of Korea.
SEOUL - SOUTH Korea is expected to post a trade surplus of four billion dollars in the fourth quarter of this year thanks to falling oil and commodity costs, an official said on Sunday.
The prediction came at a meeting between Prime Minister Han Seung-Soo and top economic policymakers, said Cho Won-Dong, head of the government management office under the prime minister.
The Financial Services Commission, the country's financial watchdog, has promised to set up a 10-trillion-won (S$10.2 billion) bond fund by pooling money from banks, pension funds and others.
The Bank of Korea is highly likely to contribute up to five trillion won to the fund, which will be used to buy financial and corporate debts, Yonhap news agency said.
It is slated to hold a policy meeting on Monday to finalise the amount, Yonhap said.
South Korea has announced a series of steps to stabilise its markets, including 16 billion dollars in loans to ease a dollar shortage for firms importing raw materials and exporting goods.
Last week, the state-owned Industrial Bank of Korea (IBK) said it plans to extend up to 12 trillion won in loans next year to help cash-strapped smaller firms.
The figure would represent a 20 per cent rise from this year's planned lending.
Private banks have been increasingly reluctant to extend loans, especially to smaller firms as credit dries up even though the export-led economy is slowing down.
Corporate bankruptcies hit a three-year high in October amid tightening financial conditions caused by the global credit crisis.
The central bank said the number of firms declaring bankruptcy rose from 203 in September to 321 in October, the highest monthly figure since March 2005.
The economy grew 0.6 per cent quarter-on-quarter in July to September, the slowest quarter-on-quarter growth in four years as households and smaller firms struggled with mounting debt and increasingly cut spending. -- AFP
