Seoul: South Korea’s financial regulator announced plans on Monday to extend emergency liquidity and market stabilization measures, pledging up to 100 trillion won (US$68.12 billion) to aid companies impacted by the comprehensive tariffs imposed by the Donald Trump administration.
According to Yonhap News Agency, Kim Byoung-hwan, the chief of the Financial Services Commission (FSC), confirmed these support measures during a meeting with leaders from South Korea’s top five financial holding firms: KB, Shinhan, Hana, Woori, and NH Nonghyup. Kim urged these institutions to actively participate in providing critical funds to businesses facing economic uncertainties.
Kim highlighted the heightened uncertainties affecting the domestic economy, industries, and financial markets due to the tariff policy. He emphasized the need for financial holding companies and policy finance institutions to lead market stabilization efforts and play an active role in offering financial support across various sectors.
The FSC chief assured that the regulator is committed to implementing market stabilization measures worth 100 trillion won to ensure liquidity is available whenever necessary. The stabilization program includes a 40 trillion-won fund aimed at securing stability in the bond market, alongside approximately 60 trillion won designated for project financing (PF) and construction-related sectors.
Donald Trump has pledged to enforce “reciprocal” tariffs on imports from most global markets, which include imposing 25 percent duties on South Korean goods starting Wednesday (U.S. time). Additionally, a 10 percent “baseline” tariff on foreign imports was enforced beginning last Saturday.
The tariff scheme raises concerns about a potential global trade war and economic recession, prompting the South Korean government to devise countermeasures to protect its export-driven economy. Kim also addressed fears that the U.S. reciprocal tariffs could not only directly impact exporters but also pose challenges for their partner firms. He stressed the importance for banks to closely monitor market conditions and business impacts, ensuring timely provision of necessary funds and support.
To tackle market volatility, the FSC has initiated a round-the-clock monitoring system, pledging to intervene as needed to minimize disruptions. The regulator also committed to accelerating efforts to establish a 50 trillion-won fund for advanced strategic industries, aimed at countering the global trade war and fostering sustainable growth within the domestic economy.