President Moon Jae-in (2nd from L) makes opening remarks at an emergency economic council meeting at Cheong Wa Dae on March 24, 2020. (Yonhap)
SEOUL, March 24 (Korea Bizwire) — President Moon Jae-in unveiled plans Tuesday to double the size of his administration’s emergency-financing aid package to 100 trillion won (US$80 billion) for businesses here under growing stress from the coronavirus pandemic, and he announced a set of special funds to stabilize South Korea’s bond and securities markets.
He stressed that the government would serve as a “stout breakwater” to prevent the huge crisis facing the nation’s firms, speaking at the second session of the emergency economic council.
The president assured the public that every measure to prevent them going bankrupt due to the impact of COVID-19 would be taken.
“Normal companies would never go out of business due to a temporary lack of liquidity,” Moon emphasized.
To that end, he added, the government has decided to increase the emergency rescue funds to 100 trillion won from the 50 trillion won agreed in the council’s inaugural meeting last week.
The aid plan, agreed to last week, was meant for small and medium-sized firms, tiny shop owners and the self-employed, featuring government-backed loans and guarantees.
The 100 trillion-won package would cover conglomerates and other major companies as well.
South Korea will also reactivate a bond market stabilization fund amounting to 20 trillion won, double that created during the 2008 global financial crisis.
In addition, a 10.7 trillion-won securities market stabilization fund will be launched as a buffer against capital outflows. It’s far larger than the 500 billion won of funding in 2008, according to Moon.
He pointed out that there are concerns businesses could be drawn into a liquidity crisis arising from a collapse in global supply chains, a sharp fall in exports and downgraded credit ratings.
He also called for urgent steps to mitigate state insurance and public utility service fee burdens, which are needed to help maintain the employment of workers.
Participants in the meeting included Finance Minister Hong Nam-ki, Bank of Korea (BOK) Gov. Lee Ju-yeol and Financial Services Commission (FSC) Chairman Eun Sung-soo.
(Yonhap)
