BOK to offer additional W5tr in special loans to coronavirus-hit firms

The Bank of Korea (BOK) on Wednesday said it plans to provide an additional 5 trillion won ($4.08 billion) in special, low-interest loans to local businesses hit by the new coronavirus outbreak.

The additional amount will bring to 35 trillion won the amount the central bank will provide to local lenders, which in turn will offer low-interest loans to firms.

"The move is expected to help expand the financial access of self-employed businesses and small and medium-sized firms that are facing difficulties due to the COVID-19 outbreak and improve their liquidity conditions," the BOK said in a released statement.

The BOK boosted its overall funding for special corporate loans by 5 trillion won to the current 30 trillion won at its rate-setting meeting held Feb. 27 when it slashed its growth outlook for Asia's fourth-largest economy to 2.1 percent from the previous 2.3 percent.

BOK Gov. Lee Ju-yeol has noted the country's economic growth may yet fall short of the latest estimate this year due to the COVID-19 pandemic.

The plan to provide additional funds to local businesses will be put to a vote at a BOK board meeting set to be held Thursday, which will unlikely involve discussions on monetary policy actions with its next rate-setting meeting slated for May 28.

Steps taken so far by the South Korean central bank against the coronavirus outbreak include what it calls Korean version of quantitative easing, under which the BOK purchases "unlimited" amount of local bonds in repo operations.

It has also delivered its first emergency rate cut in over a decade, slashing the key rate to a record low of 0.75 percent from 1.25 percent in March. (Yonhap)