2^nd Crisis Management Meeting of 2020

12^th Ministerial Meeting to Respond to COVID-19 Outbreak

 

Government to Work on Financial Market Stability

 

 

Deputy Prime Minister Hong Nam-ki presided over the 2^nd Crisis Management Meeting of 2020, which is also the 12^th Ministerial Meeting to Respond to COVID-19 Outbreak.  Financial support for exporters and the frontloading of public sector spending to help stimulate the economy were main topics of discussion.  DPM Hong talked about measures to be taken to avoid FX market volatility and plans to increase wage subsidies at the beginning of the meeting.

 

The following is a summary of Deputy Prime Minister Hong’s keynote address.

 

Provide FX liquidity

 

In addition to the forex futures trading limit raised by 25 percent last week, the government will temporarily provide a bank levy[1] exemption and work on temporarily easing the 80 percent FX liquidity coverage ratio[2].  We will work to use the Korea-US currency swap line and to provide the market with enough liquidity.

 

Increase wage subsidies

 

To help businesses retain their employees, the government will increase its wage subsidies from 100 billion won to 500 billion won, expanding to all industries for a limited period from April 1 to June 30.

 

Topics of discussion

 

We will discuss the following at today’s meeting.

 

1) Emergency financial support worth 20 trillion won for exporters and Korean businesses overseas, a part of the over 100 trillion support announced at the presidential meeting on economic emergency held this week

 

- New liquidity worth 8.7 trillion won: 4.7 trillion won worth of loans and guarantees and 4.0 trillion won worth of emergency funding for business operation

- 11.3 trillion won worth of refinancing funds to extend business loans for up to a year

 

2) Frontloading of public sector spending to help stimulate the economy

3) Ways to spend over 75 percent of the supplementary budget within two months from now

 

Please refer to the attached pdf