Cash-strapped firms to get liquidity injection

SEOUL, Jan. 12 (Yonhap) -- Local financial institutions will supply a combined 13
trillion won (US$9.5 billion) to help companies cope with a possible increase in
cash demand before the Lunar New Year holiday, the government said Monday.

The envisioned money supply from 18 banks, including the central bank and
state-run guarantee agencies, is higher than the 6 trillion won injection during
the same period last year, according to the Ministry of Strategy and Finance.
The move comes as concerns deepen over a possible cash crunch among smaller
companies in the run-up to the Lunar New Year holiday that falls on Jan. 26.
Companies usually give employees special bonuses to mark one of the nation's
biggest holidays, causing a spike in cash demand.
Liquidity conditions have worsened since the economy was hard-hit by the global
recession in the wake of financial turbulence in the United States last year.
According to the plan, the state-run Korea Development Bank will inject 2
trillion won to the financial system, an increase of 1.7 trillion won from last
year, while Kookmin Bank will supply 750 billion won, up from 520 billion won
last year.
The government will provide a combined 3.6 trillion won worth of guarantees for
smaller companies, up from 700 billion won offered during the same period a year
earlier, the ministry said.
kokobj@yna.co.kr
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