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Additional financial measures to come next week to revive virus-battered economy

(Yonhap)
(Yonhap)

The South Korean government will unveil an additional package of financial measures in detail next week to placate staggering financial markets roiled by the spread of the novel coronavirus.

According to financial authorities, the upcoming announcement will include follow-up measures related to the massive 50 trillion-won ($39.8 billion) financial support program that was already introduced Thursday.

The aid package, which aimed at supporting small and medium-sized firms and people with low credit ratings, includes the establishment of new stock and bond market stabilization funds.

The government will determine the size and time for the fund implementation next week first. The bond market stabilization fund worth more than 10 trillion won is nearly ready to be activated. However, authorities have yet to determine which institutions will participate for the funds.

In the meantime, authorities will further discuss expanding a primary collateralized bond obligations scheme, in a move aimed at helping ease the credit crunch for low-rated companies. Vice Finance Minister Kim Yong-beom on Thursday said the country’s financial condition review may include the structured financial instrument.

Meanwhile, the Bank of Korea is set to release the March financial stability report Thursday. The data will show the integrity of local financial institutions, household debt and corporate credit risk.

The Composite Consumer Sentiment Index data for March will also be unveiled Friday, however, it is likely to further drop noticeably as the COVID-19 pandemic fears have dampened consumer sentiment.

The CCSI for February already marked a 7.3 point drop -- the steepest decline since the MERS outbreak in June 2015 -- on-month to 96.9. A reading below the benchmark 100 means pessimists outnumber optimists.

By Jie Ye-eun (yeeun@heraldcorp.com)
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