The government and the ruling People Power Party (PPP) reached an agreement on Thursday to provide an additional 22 trillion won (US$16.7 billion) in financial assistance to the country's ailing export sector, bringing the total financial support to 63 trillion won.
The set of support measures came in response to a sharp decline in the country's exports, which plummeted by 16.5 percent on-year to US$50.33 billion in July. It marks the 10th consecutive month of decline, primarily attributable to weak demand for semiconductors, coupled with rising prices of raw materials.
Out of the 22 trillion won newly pledged, 4.1 trillion won will be allocated to supporting the development of new export routes, while 17.9 trillion won will be dedicated to strengthening the competitiveness of strategic export sectors.
"This measure is designed to strengthen the role of banks by combining the resources of policy financial institutions and the private sector to provide funding support," said Rep. Park Dae-chul, the PPP's chief policymaker, during a policy consultation meeting at the National Assembly.
For instance, 1 trillion won worth of financial funding will be provided for subcontractors of major companies making inroads overseas through cooperation with state-run credit institutions and banks, according to Park.
Additionally, major lenders and policy financial institutions will launch a program to extend special loans with an interest rate deduction of up to 1.5 percentage points for export firms.
Source: Yonhap News Agency