South Korea Cuts Export Finance Loans

South Korea has cut loans to exporting companies to help reduce the growing trade surplus with the United States and the European Community, finance ministry officials said.

They said two billion dlrs worth of foreign currency loans would be available to firms willing to import industrial facilities, and 500 mln dlrs for those importing raw and intermediary materials and parts.

Exporters, who previously received 645 won (0.769 dlrs) for each dollar’s worth of overseas orders, will now get only 575 won (0.686 dlrs), they said.

The officials said the government also stopped new bank loans given to aid the installation of export-oriented facilities by the nation’s 30 largest business groups.

A finance ministry official told Reuters the measures were part of the South Korean government’s package to curb the increase in the nation’s trade surpluses with major trading partners.

South Korea had a trade surplus of 7.2 billion dlrs with the United States in 1986, against 4.1 billion in 1985. It had a surplus of 1.09 billion dlrs last year with the EC, against 188.8 mln dlrs in 1985.