S Korea unveils new steps to stabilise markets

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SEOUL, Nov 13 (AFP): South Korea today announced new steps to stablise its markets, including a 16-billion-dollar cash injection for firms suffering from tight trade financing.
The Bank of Korea promised to give loans worth 10 billion dollars to small and medium firms to pay for their imports, while the finance ministry said it would add a further six billion dollars in loans.
The injection, which will begin Monday, aims to ease a dollar shortage for firms importing raw materials and exporting goods, the ministry said.
The central bank said it would also increase foreign currency liquidity via long-term currency swaps.
Separately, the Financial Services Commission said it would set up a 10-trillion-won (7.2 billion dollars) bond market stabilisation fund.
The state-run Korea Development Bank will provide 20 per cent of the fund, while the remaining 80 per cent will be financed by pension funds, banks, insurance firms and other private investors, the watchdog said.
South Korea is trying hard to stimulate sluggish domestic demand because of worries over a likely slowdown in its crucial export sector as the world enters a period of economic gloom.
The country's economy grew 0.6 per cent quarter-on-quarter in July to September, the slowest quarter-on-quarter growth in four years as households and smaller firms struggle with mounting debt and increasingly cut spending.