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To: Mark Madden who wrote (1767)	12/12/1997 8:55:00 AM
From: Will Cunningham	Read Replies (1) \| Respond to of 9256

And here's an example: South Korea: Seoul asks IMF to speed rescue deal FRIDAY DECEMBER 12 1997 -------------------------------------------------------------------------------- By John Burton in Seoul and Gerard Baker in Washington -------------------------------------------------------------------------------- South Korea is to ask the International Monetary Fund and other donors to speed the delivery of a $57bn rescue programme, in an attempt to escape its deepening financial crisis. But the US, which has pledged $5bn, yesterday brushed aside calls for accelerated assistance, insisting the Korean authorities stick to the reforms promised in the IMF programme. Fears of possible foreign loan defaults by the world's 11th largest economy forced South Korean markets downwards in early trading this morning after more heavy falls the previous day. Both the stock market and the currency were down but the won recovered after intervention by the central bank. At 0040 GMT the Korea Composite Stock Price Index was down 24.79 points, or 6.6 per cent at 352.58. The won plunged to its limit low at the market's open but then recovered and by 0032 GMT the dollar was trading at 1,710 won, down from 1,719.80 won. On Thursday the threat of a debt implosion caused the won, to fall by its daily limit of 10 per cent for a fourth consecutive day to 1,719.80 won to the dollar. Asian, European and US markets also came under pressure. The South Korean finance ministry said it would ask IMF or other donors to the $57bn bail-out to provide "bridging" loans to help pay at least $20bn in short-term overseas debts due by month's end if foreign lenders refused to roll them over. Korean banks and companies owe more than $100bn in overseas loans over the next year. Special envoys would go shortly to Washington and Tokyo to discuss additional funds with IMF, US and Japanese officials, the government said. The IMF had no comment on the Korean request for funds. But Robert Rubin, the US Treasury secretary, said: "They've got a strong programme with the IMF and I think that the key is for them to implement that programme and implement it effectively. That's the process we're all discussing with Korea right now," Mr Rubin said. The US, along with other countries, has agreed to provide additional financing if the IMF's and other multilateral lenders' funds prove insufficient. But the $5bn it has pledged will be released only after all multilateral sources have been exhausted. This framework of support was painstakingly constructed in negotiations with Asia-Pacific governments and the US is highly unlikely to agree to its unravelling. Korea's usable foreign currency reserves now stand at $10bn. Seoul expects another $7.5bn in already scheduled loans this month, including $3.5bn from the IMF, $2bn from the World Bank and $2bn from the Asian Development Bank, said Lim Chang-yuel, the Korean finance minister. "There is a 50/50 chance that Korea could default soon if sufficient IMF funds don't arrive in time," said a regional economist with a Western brokerage. "My worry is that Korea's problems could spread to Japan and international banks." New credit downgrades on Korean foreign-currency bond issues by Moody's Investor Service, the US credit rating agencies, dealt a blow to Korea's troubled banks in getting new loans abroad. Officials at the Korean Development Bank - the main offshore borrowing arm of the government - yesterday said they were likely to postpone a $2bn bond issue which had been planned for this week. There were also media reports that Korean oil companies, which previously enjoyed open credit lines, were being required by suppliers to submit letters of credit from reputable international banks for each deal. Letters of credit issued by banks promise suppliers that they will meet the debt payments in case of default by the suppliers. The financial crisis yesterday forced Kim Young-sam, the Korean president, to make his second public apology in the last three weeks about the economy. Lex External link: IMF -------------------------------------------------------------------------------- For other articles on this subject, try Site Search and The Archive -------------------------------------------------------------------------------- c Copyright the Financial Times Limited 1997 "FT" and "Financial Times" are trademarks of The Financial Times Limited.