Business | Markets

South Korea pledges $130b to avert market crash

South Korea announced measures on Sunday to shore up its banks by guaranteeing their foreign debt and pumping more money into the banking sector.

  • Agencies
  • Published: 09:51 October 19, 2008
  • Gulf News

  • South Korean Minister of Strategy and Finance Kang Man-soo (centre), Chairman of the Financial Services Commission Jun Kwang-woo (right), and Bank of Korea Governor Lee Seong-tae (left) participate at a joint press conference in Seoul.
  • Image Credit: AP
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Seoul: South Korea announced on Sunday a $130 billion rescue fund for its markets affected by the global financial crisis.

South Korea will be shoring up its banks by guaranteeing their foreign debt and pumping more money into the banking sector.

The country's top three economic planners told a joint news conference that on top of the guarantees worth $100 billion, they would also inject $30 billion to banks and exporters and help smaller firms get $9 billion in loans.

"The government has decided to join in global coordinated efforts to stabilise financial markets and we'll continue to provide pre-emptive, decisive and sufficient measures to this end," said South Korea's Finance Minister Kang Man-soo.

The past weeks has seen a storm of market support measures from financial authorities around the globe ranging from interest rate cuts to bank nationalisations.

"We believe providing the government guarantee on banks' foreign exchange dealings is the strongest step to save our foreign exchange reserves," Kang said.

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