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| S Korea guarantees foreign loans | S Korea guarantees foreign loans |
| (about 1 hour later) | |
| South Korea's government has agreed to guarantee foreign-currency borrowing by country's banks to help stabilise financial markets. | |
| The finance ministry, central bank and financial services commission said the government expected about $100bn of borrowing to be covered by the package. | The finance ministry, central bank and financial services commission said the government expected about $100bn of borrowing to be covered by the package. |
| A further $750m will be injected into the Industrial Bank of Korea, so it can expand lending to small businesses. | A further $750m will be injected into the Industrial Bank of Korea, so it can expand lending to small businesses. |
| The economy of South Korea is the third largest in Asia and 13th in the world. | The economy of South Korea is the third largest in Asia and 13th in the world. |
| It enjoys major export success in a number of manufacturing industries, but especially shipbuilding, car-making, and electronics. | It enjoys major export success in a number of manufacturing industries, but especially shipbuilding, car-making, and electronics. |
| However, analysts say the country has appeared particularly vulnerable to the global credit crisis because its banks lacked sufficient dollars to service maturing foreign debt. | However, analysts say the country has appeared particularly vulnerable to the global credit crisis because its banks lacked sufficient dollars to service maturing foreign debt. |
| In a statement, the government said it would guarantee for three years all external debt taken on by South Korean banks before 30 June 2009 in order "to avoid placing domestic banks at a comparative disadvantage in terms of overseas funding and to allay fears in the financial market". | In a statement, the government said it would guarantee for three years all external debt taken on by South Korean banks before 30 June 2009 in order "to avoid placing domestic banks at a comparative disadvantage in terms of overseas funding and to allay fears in the financial market". |
| Along with the Bank of Korea, it will also provide an additional $30bn of dollar liquidity to the banks by utilising foreign exchange reserves. | Along with the Bank of Korea, it will also provide an additional $30bn of dollar liquidity to the banks by utilising foreign exchange reserves. |
| The government said that despite the crisis, the economy and the financial sector were "sound", and that its foreign exchange reserves were "sufficient". | The government said that despite the crisis, the economy and the financial sector were "sound", and that its foreign exchange reserves were "sufficient". |