S. Korea to offer US$ 405 mil. in employment-retention subsidies to local firms from April
Updated: 2020-03-25 17:09:19 KST
To help local businesses reeling from the COVID-19 outbreak, South Korea is topping up a financial support package to encourage companies to keep hold of their employees.
The extra funds amount to almost 325 million U.S. dollars and raise the total amount to more than 405 million dollars.
Meeting with other economy-related ministers on Wednesday, Finance Minister Hong Nam-ki said the support will be available for all industries and will be distributed between April and June.
It's hoped the subsidies help companies trying to maintain their employment numbers despite the challenging economic climate.
It means that, even if the businesses have to close temporarily, they'll keep their workers on the books.
Hong said applications for the subsidies have been strong across all industries.
"The subsidies are expected to help companies fend off bankruptcy and avoid a sharp contraction of jobs. The coronavirus impact is making manufacturing almost impossible. The support will help workers sustain their wages and their spending capacity."
In addition to that, the government will inject some seven billion U.S. dollars in extra liquidity to help South Korea's importers and exporters.
The current loan maturity for importers and exporters will also be extended by up to a year on loans amounting to more than 9-billion dollars.
For financial companies, the government will exempt them from a levy that had been imposed to maintain market stability in case of financial turbulence.
The minister added the government will also ease the cap on foreign exchange liquidity coverage ratio for banks, to help them secure foreign currencies more easily.
The cap is currently set at 80 percent.
The Liquidity Coverage Ratio or LCR is often used as a benchmark to monitor their financial soundness.
Aside from that, the government and the ruling party plan to postpone or exempt pension and national insurance fees, as well as electric charges.
From Wednesday, the Ministry of SMEs and Startups began accepting loan applications from small companies with low credit ratings, with applicants forming long lines on the first day.
The applicants will be able to borrow up to 81-hundred dollars each.
Yoon Jung-min, Arirang News.