ID :
25764
Tue, 10/21/2008 - 16:09
Auther :
Shortlink :
https://www.oananews.org//node/25764
The shortlink copeid
Cabinet approves bank debt payment guarantee
By Shin Hae-in
SEOUL, Oct. 21 (Yonhap) -- The South Korean government on Tuesday approved a US$130 billion rescue package aimed at shoring up the local stock market and a troubled currency shortage triggered by the global financial crisis.
The final decision now lies in the hands of the parliament, which has been widely
split over the conservative administration's recent economic measures.
The package provides three-year state guarantees for local banks' foreign debts
worth up to $100 billion, with another $30 billion going directly to banks and
companies.
The latest market stabilization moves come as analysts question South Korean
banks' ability to acquire enough dollars to pay off maturing foreign loans as
credit conditions tighten worldwide.
An already squeezed credit market took yet another bad turn following the
collapse of five of the largest financial institutions on Wall Street last month.
South Korea's won has been one of the worst-performing currencies among Asian
countries, losing about 25 percent since the start of this year. The nation's
benchmark stock index has fallen more than 35 percent this year, though it
climbed slightly on the back of proposed government measures, closing up about
2.3 percent on Monday.
It remains to be seen, however, whether the ruling party-controlled parliament
will act promptly on settling the emergency measures.
While the ruling Grand National Party, holding 172 seats in the 299-member
unicameral house, fully supports the government plan, opposition parties remain
widely divided over the issue.
Populist leaders with the main opposition Democratic Party and the left-leaning
Democratic Labor Party are skeptical about using taxpayers' money to fix what
they claim are blunders made by the government and the state-run banks.
Opposition parties have been calling for the replacement of President Lee
Myung-bak's economic policymakers led by Finance Minister Kang Man-soo,
questioning their ability to tackle challenges in the financial market.
SEOUL, Oct. 21 (Yonhap) -- The South Korean government on Tuesday approved a US$130 billion rescue package aimed at shoring up the local stock market and a troubled currency shortage triggered by the global financial crisis.
The final decision now lies in the hands of the parliament, which has been widely
split over the conservative administration's recent economic measures.
The package provides three-year state guarantees for local banks' foreign debts
worth up to $100 billion, with another $30 billion going directly to banks and
companies.
The latest market stabilization moves come as analysts question South Korean
banks' ability to acquire enough dollars to pay off maturing foreign loans as
credit conditions tighten worldwide.
An already squeezed credit market took yet another bad turn following the
collapse of five of the largest financial institutions on Wall Street last month.
South Korea's won has been one of the worst-performing currencies among Asian
countries, losing about 25 percent since the start of this year. The nation's
benchmark stock index has fallen more than 35 percent this year, though it
climbed slightly on the back of proposed government measures, closing up about
2.3 percent on Monday.
It remains to be seen, however, whether the ruling party-controlled parliament
will act promptly on settling the emergency measures.
While the ruling Grand National Party, holding 172 seats in the 299-member
unicameral house, fully supports the government plan, opposition parties remain
widely divided over the issue.
Populist leaders with the main opposition Democratic Party and the left-leaning
Democratic Labor Party are skeptical about using taxpayers' money to fix what
they claim are blunders made by the government and the state-run banks.
Opposition parties have been calling for the replacement of President Lee
Myung-bak's economic policymakers led by Finance Minister Kang Man-soo,
questioning their ability to tackle challenges in the financial market.
