BOK to ease rules on foreign currency loans for big exporters

SEOUL, Dec. 28 (Yonhap) -- South Korea's central bank said Sunday it will ease
rules on foreign currency loans for local large exporters to help such companies
cope with tight export financing conditions.
The Bank of Korea (BOK) said it will permit local large exporters to tap into
US$10 billion in foreign currency loans earmarked for export financing.
Currently, the BOK is offering foreign currency loans to banks providing trade
bills of small- and mid-sized exporters as collateral. The BOK noted that the new
move will take effect starting Monday and will be run on a temporary basis until
the end of December 2009.
The move is part of the latest steps taken by the government and the BOK to
support trade-related financing as exports, which account for 60 percent of the
country's economy, show signs of losing steam.
In mid-November, the government and the BOK announced a plan to offer $16 billion
of foreign currency liquidity to ease dollar shortages among local exporters.
"As liquidity supply by the authorities has been focused on smaller firms,
supporting export financing for larger companies has not been relatively smooth,"
the central bank said. "To revive the country's export-oriented economy,
expanding export financing is all the more important," it added.
The South Korean economy grew 0.5 percent in the third quarter from three months
earlier, the slowest growth in four years, as export growth declined amid weak
domestic demand.
The country's overseas shipments have already shown signs of slowing down as the
global downturn has dealt a blow to emerging markets like China, the main
destination of South Korean exports. Korean exports declined 18.3 percent on-year
in November, the biggest drop in seven years.
sooyeon@yna.co.kr
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