South Korea’s central bank said on Monday it would put up as much as half of a proposed 10 trillion won ($6.70 billion) fund to help local firms and banks escape a liquidity squeeze throttling Asia’s fourth-biggest economy.

The following is a summary of key measures South Korea has taken since September to shore up Asia’s fourth-largest economy and its financial markets in the face of global financial turmoil and economic recession:

GOVERNMENT FISCAL SPENDING MEASURES

Nov. 3 - The government unveils an economic stimulus package worth at least 14 trillion won ($9.37 billion), including tax cuts, in an attempt to secure a soft landing for the local economy.

Sept. 18 - Parliament approves a 4.57 trillion won supplementary budget for 2008, focusing on easing the impact of high oil prices and developing overseas energy and resources.

CENTRAL BANK MEASURES

Nov. 24 - The central bank says it will put up to 5 trillion won into a fund to buy bonds from local companies and banks to help them cope with a liquidity squeeze.

Nov. 19 - The Bank of Korea injects 1 trillion won into financial system by purchasing Treasuries.

Nov. 11 - The Bank of Korea begins to buy bank bonds. The central bank injects 1 trillion won into local banking system via 63-day repurchase agreements with bonds issued by banks serving as collateral.

Nov. 7 - The Bank of Korea cuts its policy rate by 25 basis points to 4.00 percent, the third cut in a month, amid growing concerns over fast cooling economy.

Oct. 30 - The Bank of Korea arranges a $30 billion currency swap with the U.S. Federal Reserve.

Oct. 27 - The Bank of Korea cuts its policy rate by a record 75 basis points to 4.25 percent in an emergency action to stabilise markets and boost the economy.

Oct. 23 - The Bank of Korea raises the ceiling on low-interest loans to smaller companies for the first time in seven years, increasing it by 2.5 trillion won to 9 trillion won.

Oct. 9 - The Bank of Korea cuts its policy interest rate by 25 basis points to 5.00 percent from a 7-1/2-year high of 5.25 percent, joining a round of worldwide rate cuts aimed at tackling global financial market turmoil.

MEASURES FOR FINANCIAL, CORPORATE SECTORS

Nov. 14 - The government may draw up pre-emptive measures to help domestic banks boost their capital ratio, the country’s top financial regulator says.

Nov. 13 - The Financial Services Commission proposes a 10 trillion won fund to invest in bonds issued by local banks and companies.

Oct. 21 - The government offers to spend 5 trillion won buying unsold new homes and land that local builders want to sell to finance their debt payments.

Oct. 17 - State-run National Pension Service says it will buy bonds issued by commercial banks and local companies to ease a deepening credit crunch.

Oct. 9 - The Finance Ministry says it will offer 800 billion won in a financial support package to small and medium-sized companies by providing insurance on sales receivables and loans.

MEASURES TO EASE DOLLAR LIQUIDITY

Nov. 13 - The Bank of Korea will offer $10 billion to exporters for trade finance and the Finance Ministry will provide $6 billion for both exporters and importers, the authorities say.

Nov. 3 - The government says it plans to raise foreign-currency bond sales in 2009 to fund foreign exchange market intervention to 6.6 trillion won from the previous 5 trillion won.

Oct. 30 - The Bank of Korea ties up a $30 billion currency swap facility with the U.S. Federal Reserve to ease a dollar crunch at local financial companies.

Oct. 19 - South Korea announces a package worth over $130 billion to rescue its markets dragged down in the global financial crisis, offering a state guarantee on foreign debt and promising to recapitalise financial firms.

Oct. 15 - The Bank of Korea says it will buy $10 billion worth of U.S. treasuries by the end of this year from the state-run pension service to rebuild steadily falling foreign exchange reserves.

Oct. 6 - The Finance Ministry says it will inject $5 billion to domestic banks and cash-strapped exporters through the state-run Export-Import Bank of Korea.

Sept. 26 - The Finance Ministry says it will inject $10 billion into the local currency swap market until the middle of October to help domestic banks stave off persistent dollar funding shortages.

Source: http://www.afxnews.com

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