South Korean government announced on Thursday that it will provide 500 billion won (364.1 million U.S. dollars) to help small-and medium-sized enterprises(SMEs) to cope with global financial turmoil.
At a meeting with CEOs from local SMEs, South Korean Finince Minister Kang Man-soo pledged the government will take measures to prevent external developments like unfavorable foreign exchange rates and liquidity shortages from forcing healthy businesses to go belly-up.
All support is aimed at preventing exporters that are otherwise doing well from going bankrupt due to losses incurred by the unexpected turn in the won-dollar exchange rate and drying up of liquidity, he said.
The government will use its foreign reserves in the unlikely event that local banks face a default situation, so there is little concern for the business community, he added.
The government will offer 200 billion won(145.7 million U.S. dollars) as foreign currency loans while increase the size of account receivables insurance by 300 billion won(218.4 million U.S. dollars) to facilitate business-to-business transactions, he said.
He stressed that South Korea was not heading towards another financial crisis that paralyzed South Korea's economy in 1997-1998.
Unlike the past, foreign reserve holdings exceed outstanding debt while companies are burdened with far less liabilities, he said.
"In terms of debt, local companies are far more healthy than U.S. and Japanese firms," the official said.
Source: Xinhua
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