South Korea to guarantee banks' FX borrowings
South Korea's government and ruling party agreed on Sunday to provide local commercial banks with government guarantee on foreign-exchange borrowings from abroad for up to three years, local media reported.
Senior officials from the government and the Grand National Party also agreed at an emergency meeting that the guarantee would apply to money borrowed until June 2009, Yonhap news agency and YTN cable news channel reported.
YTN quoted a source as saying the government expects about $100 billion of borrowings would get the government guarantee, Reuters reported.
The two media also said the government would inject 1 trillion won ($750 million) into Industrial Bank of Korea (024110.KS: Quote, Profile, Research, Stock Buzz) so that the state-invested bank could expand lending to small and medium-sized enterprises.