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S. Korea to provide additional 23 tln won in financial support to export sector

All News 11:15 August 16, 2023

SEOUL, Aug. 16 (Yonhap) -- Financial authorities will provide 23 trillion won (US$17.2 billion) in an additional financial aid package to export companies as part of efforts to boost the country's ailing export sector, the state financial regulator said Wednesday.

The Financial Services Commission (FSC) announced a set of measures aimed at overcoming a sharp decline in South Korea's exports, which plummeted by 16.5 percent on-year to $50.33 billion in July. It marks the 10th consecutive month of decline, largely due to weak demand for semiconductors and a global economic slowdown.

The announcement comes in line with the government's plan to boost the export competitiveness of eight major industries, including semiconductors, displays, secondary batteries and electric vehicles, and win overseas contracts in 12 sectors, including nuclear power, arms, overseas construction and agriculture.

The government and policy lenders have been rolling out some 41 trillion won and 16.7 trillion won of financial assistance to the export sector this year, respectively.

Shipping containers are stacked at a port in Busan, 320 kilometers south of Seoul, in this Aug. 1, 2023, file photo. (Yonhap)

Shipping containers are stacked at a port in Busan, 320 kilometers south of Seoul, in this Aug. 1, 2023, file photo. (Yonhap)

Under the new measures, financial authorities will inject an additional 3.3 trillion won of financial assistance into companies working to make inroads into new countries and at least 300 billion-won support to companies that win large-scale overseas business projects later this year, as well as create a 500 billion-won fund to respond to supply chain issues and trade restrictions by the third quarter of 2024.

To boost the competitiveness of strategic export industries, 11 trillion won will also be rolled out, including 5 trillion won for the chip industry and 2 trillion won each for the secondary battery, bio and nuclear power industries.

The top five domestic commercial banks will also create a 5.4 trillion-won loan for export firms at low borrowing costs.

The FSC also said it will work to relieve various difficulties the export firms face, such as payment referrals and currency exchange fluctuations.

"With a sufficient supply of export finances and a reduction in the pressure to get financial help, we expect our companies to restore the level of their exports and strengthen their competitiveness in the medium to long term," the FSC said.


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