SOUTH KOREA: THE INTERNATIONAL MONETARY FUND (IMF) SAYS IT WILL ARRANGE 55 BILLION U.S. DOLLAR LOAN TO HELP SOUTH KOREA OUT OF ITS DEBT CRISIS

Record ID: 474259

  • Title: SOUTH KOREA: THE INTERNATIONAL MONETARY FUND (IMF) SAYS IT WILL ARRANGE 55 BILLION U.S. DOLLAR LOAN TO HELP SOUTH KOREA OUT OF ITS DEBT CRISIS
  • Date: 3rd December 1997
  • Summary: SEOUL, SOUTH KOREA (DECEMBER 3, 1997) (RTV) 1. GV CITY/ SLV STREET SCENES 0.14 2. SCU SOUTH KOREAN FINANCE MINISTER LIM CHANG-YUEL AND MICHEL CAMDESSUS, MANAGING DIRECTOR OF IMF (INTERNATIONAL MONETARY FUND)/ LIM SIGNING DOCUMENT/ SHAKING HANDS (2 SHOTS) 0.52 3. SLV PRESSER 0.57 4. SCU MEDIA WATCHING 1.01
  • Embargoed: 18th December 1997 12:00
  • Keywords:
  • Location: SEOUL, SOUTH KOREA
  • City:
  • Country: South Korea
  • Reuters ID: LVA66LO6FOG9YWLSFSRACYRZOH0I
  • Story Text: INTRO: The International Monetary Fund (IMF) has said it would arrange 55 billion U.S dollars for South Korea in its biggest ever rescue effort, as the country tries to dig out of a deepening debt crisis.

    Full details of Wednesday's (December 3) agreement in Seoul would not be disclosed until after IMF Managing Director Michel Camdessus submits it to his board for approval on Thursday.

    It is expected to call for Seoul to put the brakes on economic growth, liquidate or restructure troubled banks at the heart of the crisis, further open up the financial markets, cut public spending and possibly raise taxes.

    Finance Minister Lim Chang-yuel and central Bank of Korea Governor Lee Kyung-shick signed a letter of intent with the Fund.

    Camdessus said that the IMF would provide 21 billion U.S dollars in standby credits. The World Bank would provide another 10 billion U.S dollars, "in support of specific structural reform programmes", and the Asian Development Bank would give 4 billion U.S dollars, "in support of policy and institutional reforms", he added.

    Other countries, including the United States, Britain, Japan, Germany, France, Canada and Australia, would pitch in a total of up to 20 billion U.S dollars.

    Camdessus also said that the implementation of Korea's economic programme will be essential to overcome a difficult period in Korea's economic history.

    Finance Minister Lim said: "I'm really grateful to IMF, World Bank, ADB and other friendly countries for the loan package." Seoul is desperate for assistance because of a ticking time-bomb in the form of its short-term debt, the reason it called in the IMF.

    Finance Ministry officials said Seoul had also agreed to halve its gross domestic product growth rate to three percent next year from a projected six percent this year.

    That could swell unemployment to levels unheard of in modern Korea, an official think tank said earlier this week.

    The package is expected to have widespread political and social ramifications, more so than in many other Asian countries which have accepted similar IMF deals, due to South Korea's strong Union movement and highly nationalistic citizens.


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