SEOUL, Nov. 11 (Yonhap) -- South Korea's financial regulator said Friday it will inject more than 2.8 trillion won (US$2.1 billion) in liquidity to prop up the short-term money market and ease worries over a credit crunch.
The money will be pumped into the project-financing asset-backed commercial paper (PF-ABCP) market roiled by the fallout from a debt default linked to the Legoland theme park construction in the eastern province of Gangwon, according to the Financial Services Commission (FSC).
Under the plan, over 1 trillion won will be provided to purchase builders-guaranteed PF-ABCPs through CP-buying programs of the state-run Korea Development Bank and the Korea Credit Guarantee Fund.
About 1.8 trillion won will also be injected for brokerages-backed PF-ABCPs, the FSC said.
The decision is the latest in a series of steps the government has unveiled to stabilize the debt market in the wake of the Legoland debacle and soaring worries over a credit crunch.
The government earlier decided to inject at least 50 trillion won in liquidity into the debt market mostly through bond-buying schemes. It also urged local banks to minimize bond selling as part of market stabilization efforts.
Faltering exports hurt S. Korea's growth momentum, no improvement in sight
Apple Pay draws mixed reaction in S. Korea over its imminent service
'Korean paper' hit hard by insurer's uncalled bonds
(News Focus) Bond market jitters likely to persist despite stabilization measures due to high inflation, high rates: analysts
Hanwha eyes major boost in defense, green energy drive with envisioned Daewoo Shipbuilding takeover