Korea to launch W2tr biz support program to counter Russian-Ukrainian crisis if needed

South Korea’s top financial regulator said on Friday a support package worth 2 trillion won ($1.66 billion) would be launched to protect local businesses from economic hardship stemming from the Russian invasion. on a large scale of Ukraine, if necessary.

“We will thoroughly examine the extent of the damage and the financial situation of our exporters and importers in order to avoid any difficulties resulting from the Ukrainian crisis,” Financial Services Commission Chairman Koh Seung-beom said during the meeting. a joint meeting of financial authorities.

“A financial support program will be launched for companies if necessary,” he added, with the FSC explaining that the program would be endowed with a maximum of 2 trillion won.

Although financial authorities have pointed to the limited effect of the Russian-Ukrainian crisis on the local market in recent days, Koh said the economy still needs to prepare for uncertainties.

“With the Ukraine crisis entering a new phase yesterday, local and global markets reacted sensitively to new developments and uncertainties, and those regarding currencies rose,” Koh noted.

The Korean won was trading at 1,203.2 against the US dollar around 2:30 p.m. Friday, weakening 0.11% from the previous trading session.

Watchdog Financial Supervisory Service said local financial institutions’ exposure to “Russia’s woes”, including the global sanctions recently imposed on the country, is currently “minimal”. But companies must develop their own contingency plans to counter tougher penalties that could follow later, the watchdog warned.

Earlier this week, US President Joe Biden imposed tough new sanctions on Russia for its full-scale invasion of Ukraine, which involved taking action against Russian banks. Sanctions were imposed on two Russian public financial institutions and five Kremlin-linked elites, including the Bank for Development and Foreign Economic Affairs, known as Vnesheconombank, and Promsvyazbank Public Joint Stock Company, as well as 42 of their subsidiaries.

Yonhap News Agency, citing an unnamed financial industry source, said on Thursday that banks under U.S. sanctions do not conduct “active financial transactions” with Korean companies or individuals.

By Jung Min-kyung ([email protected])