Seoul to offer $100 bln payment guarantee for banks

SEOUL, Oct. 19 (Yonhap) -- The South Korean government on Sunday announced a package of foreign currency payment guarantees for domestic banks, worth US$100 billion, in a bid to help stabilize the nation's volatile financial markets.

Under the latest policy package agreed upon during a meeting of top policymakers
and ruling party leaders, the government will guarantee the payment of all
foreign currency loans raised by Korean lenders abroad until June next year for a
period of three years.
In a relevant move to expand the nation's foreign currency liquidity, the
government will also extend an additional $30 billion to banks and small- and
medium-sized exporters while infusing about 1 trillion won into the state-funded
Industrial Bank of Korea to support cash-strapped small businesses.
The government's unprecedented foreign currency settlement guarantee program was
mapped out early Sunday morning, when Prime Minister Han Seung-soo met with Grand
National Party Chairman Park Hee-tae and other top government and party officials
to discuss measures to stabilize the local financial market.
All told, the government's latest foreign currency payment guarantee will amount
to about $100 billion won, said the officials who attended the meeting.