South Korea central bank raises ceiling for low-rate lending for firms

[SEOUL] South Korea's central bank said on Thursday it would increase the ceiling on its special lending programmes for smaller firms by 5 trillion won (S$5.7 billion) from next month to support the faltering economic recovery.

The Bank of Korea said in a statement issued after a board meeting that the increased ceiling would be allocated to three programs designed to support foreign trading firms, capital investment and business start-ups.

Under the programs, the central bank provides funds banks at low interest rates, ranging from 0.50 per cent to 0.75 per cent, to banks to support their lending to eligible companies. The existing ceiling was 20 trillion won.

The Bank of Korea said another 4 trillion won already available under the existing ceiling would also be allocated to the three programmes.

REUTERS