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Global Biz

S. Korea's financial watchdog to further maintain stimulus

(Xinhua)
Updated: 2010-01-18 18:48

SEOUL: South Korea's financial watchdog said Monday it will keep up its stimulus policy drives, such as frontloading its fiscal budget, in a bid to sustain the country's growth momentum.

"It is very much important... to sustain this growth momentum. In this regard, we are frontloading 60 pct of our physical budget in the first half of the year," Ernst Lee, spokesman for the Financial Services Commission (FSC) said in a briefing.

In addition, the watchdog said it will continue to provide credit guarantees for SMEs, but further down the credit guarantee ratio, from the current level of 95 percent to 85 percent by July.

With respect to the decrease of the coverage, the FSC explained that it would like to withdraw some unconventional method and policy measures from last year although it would like to maintain its stimulus move.

The FSC also vowed to encourage low-income families by providing credit for them via microcredit lending system.

"We have enlarged system (South Korea's Miso Credit Bank) and we are further expanding it to the end of the year," Lee said, adding that the FSC would continue to support the system.

The announcement came a week after global appraiser Moody's issued a report on global economic forecast, as well as on South Korea.

The credit rating agency expected South Korea to emerge out of the economic downturn at the fastest rate among its peers.

Echoing the report, the FSC also said the South Korean economy is currently in "pretty much good shape."