South Korea to Expand Lending Program for Exporters Fighting YenCynthia Kim
South Korea will add 11.1 trillion won ($10.1 billion) of financial support this year for companies including small- to medium-sized exporters grappling with a sliding yen, the government said.
Special loan programs for exporters and smaller contractors building overseas plants will be boosted to 82.1 trillion won from 71 trillion won, the Ministry of Trade, Industry and Energy said in an e-mailed statement today. The loans will be provided by state-run financial institutions such as Export-Import Bank of Korea and Korea Finance Corporation.
“We will achieve our export target this year as planned with the support measures for small- and medium-sized companies,” said Yoon Sang Jick, minister of trade, industry and energy. “We will closely monitor the yen and other external uncertainties.” The ministry in January said it aims for exports to grow 4.1 percent this year.
While Asia’s fourth-largest economy expanded at the fastest pace in two years in the first quarter, weakness in the Japanese currency threatens to undermine exports of electronics, automobiles and steel. March industrial production fell 2.6 percent from a month earlier, the biggest drop in a year, a Statistics Korea report showed yesterday.
The nation is in “urgent need of support measures,” the ministry said in the statement.
Separately, the Finance Ministry said it will allow some manufacturers short of production spaces to build factories at government building sites to encourage investment.