Sum of Measures 1—5 (Total Package)
|Measure||Amount (Local)||Amount (USD)||Details||Update||Source|
|01 - Liquidity Support info_outline||KRW29,650,000,000,000||USD24,301,558,384|
|01A - Short-term lending info_outline||KRW29,650,000,000,000||USD24,301,558,384||
(i) No amount/estimate: The Bank of Korea (BOK) is making unlimited amounts available through open market operations (OMOs); (ii) 27 February 2020, To augment available funding for small and medium-sized enterprises (SMEs), the BOK increased the ceiling of the Bank Intermediated Lending Support Facility by a total of KRW5 trillion. On 13 May 2020, the BOK increased the financial support by an additional KRW5 trillion to bring the ceiling to a total of KRW10 trillion. As of 10 June 2021, The BOK increased the total ceiling on the Bank Intermediated Lending Support Facility on three occasions last year (in March, May, and October 2020) by a total of KRW18 trillion, out of which KRW16 trillion was allocated to the Support Program for SMEs Affected by COVID-19 and the Support Program for Small Businesses that were operated on a temporary basis (originally set to expire at the end of March 2021). The BOK extended the operation period of the two programs by six months from 25 March 2021 to the end of September 2021. With such financial support from the BOK, bank loans amounting to KRW26.4 trillion were extended to 117,287 establishments between March 2020 and April 2021 under the Support Program for SMEs Affected by COVID-19. As for the Support Program for Small Businesses, bank loans worth KRW1.6 trillion were extended to 13,604 establishments between October 2020 and April 2021, showing steady growth in support loan performance; (iii) 22 April 2020 and end-April 2021, The allocated amount of the special purpose vehicle (SPV) to purchase commercial paper is in bullet (ii) in Measure 03A; (iv) 16 April 2020, The BOK launched the Corporate Bond-Backed Lending Facility as a lending scheme providing KRW10 trillion in loans to businesses, banks and non-bank financial institutions for up to 6 months; (v) 19 June 2020, KRW1.65 trillion in loans by policy banks as part of a financial aid package for the auto industry consisting of KRW175 billion in loans, KRW300 billion private debt fund to support first-tier subcontractors based on their accounts receivable, and KRW1 trillion in working capital loans with preferential interest rates for subcontractors with previous records of supplying parts to automakers.
|01B - Support policies for short-term lending info_outline||
No amount/estimate: The BOK has taken several measures to ensure continued accommodative monetary conditions and facilitate financial system liquidity. These include (i) Expanding the list of eligible OMO participants to include select nonbank financial institutions; (ii) Expanding eligible OMO collateral to include bank bonds and certain bonds from public enterprises and agencies; and (iii) temporarily reducing the minimum foreign exchange liquidity coverage ratio for banks to 70% (was 80%).
|01C - Forex operations info_outline||
No amount/estimate: Other measures taken to facilitate funding in foreign exchange include (i) raising the cap on foreign exchange forward positions to 50% of capital for domestic banks (previously 40%) and 250% for foreign-owned banks (was 200%), (ii) temporarily suspending the 0.1% tax on short-term nondeposit foreign exchange liabilities of financial institutions, and (iii) see (iii) in Measure 1B.
|02 - Credit creation info_outline||KRW3,800,000,000,000||USD3,114,533,621|
|02A - Financial sector lending/funding info_outline|
|02B - Support policies for long-term lending info_outline|
|02B1 - Interest rate adjustments||
(i) 17 March 2020, The BOK lowered the Base Rate by 50 basis points (bps), from 1.25% to 0.75%. On 28 May 2020, the Base Rate was further reduced by 25 bps to a record low 0.5%, where it has since remained unchanged. As of 10 June 2021, the Base Rate remain unchanged at 0.5%. 26 August 2021, The Monetary Policy Board of the Bank of Korea decided today to raise the Base Rate by 25 basis points, from 0.50% to 0.75%. 12 October 2021, The Monetary Policy Board of the Bank of Korea decided today to leave the Base Rate unchanged at 0.75% [update]; (ii) 17 March 2020, The BOK lowered the interest rate on the Bank Intermediated Lending Support Facility to 0.25% (from 0.5%-0.75%).
|02B2 - Other policies to support long-term lending||
No amount/estimate: (i) 6 May 2020, The Korea Financial Services Commission (FSC) postponed the implementation of margin requirements for non-centrally cleared OTC derivative transactions to help ease compliance burdens on financial institutions amid the COVID 19 crisis; (ii) 5 August 2020, The FSC lifted administrative sanctions and granted a 30-day extension on the reporting deadline to companies that applied for sanctions exemptions due to pandemic-related disruptions; (iii) 28 January 2021, the FSC recommends banks to temporarily limit dividends within 20% of their net profits until June 2021 to maintain banks’ loss absorbing capacity in response to the pandemic.
|02C - Loan guarantees||KRW3,800,000,000,000||USD3,114,533,621||
(i) 17 March 2020: The National Assembly approved loans and guarantees for small businesses (Note that the amount is included in (ii.a) of Non-health under Measure 5); (ii) 19 June 2020, KRW300 billion in guarantees by the Korea Credit Guaranteee Fund as part of a financial aid package for the auto industry; (iii) 2 February 2021, KRW3.5 trillion in guarantees. Each business is eligible for up to KRW300 million each.
|03 - Direct long-term lending info_outline||KRW138,900,000,000,000||USD113,844,399,987|
|03A - Long-term lending info_outline||KRW138,900,000,000,000||USD113,844,399,987||
(i) 24 March 2020, The government announced an additional financial support package of KRW100 trillion (USD80 billion) to boost local business and ease the financial burden on households and businesses: (a) expansion of financial loans and guarantees for SMEs and affected households and businesses (KRW58 trillion), (b) creation of a bond market stabilization fund to purchase corporate bonds and commercial paper (KRW20 trillion); (ii) 22 April 2020, Further augmentation of KRW35 trillion mainly through creation of a special purpose vehicle (SPV) to purchase corporate bonds and commercial paper (KRW 20 trillion) and additional funds for SME lending (KRW 10 trillion). As of end-April 2021, the SPV has purchased KRW3.3 trillion worth of corporate bonds and commercial paper; (iii) KRW5 trillion working capital support program for SME subcontractors in key industries to be financed by injecting equity into an SPV which will create a pool of underlying assets by purchasing loans and will issue primary collateralized loan obligations while management of loans will be carried out by creditor banks; (iv) 30 September 2020, KRW300 billion in concessional loans offered by the Seoul city government to small businesses restricted by social distancing rules; (v) 1 February 2021, KRW9.3 trillion to small merchants and SMEs.
|03B - Forbearance||
No amount/estimate: 2 March 2021, The Financial Services Commission (FSC) allowed SMEs and small merchants to defer loan payments until 30 September. Financial institutions will also provide consulting on the best way to structure repayments once the deferral period expires on 1 October.
|04 - Equity support info_outline||KRW11,500,000,000,000||USD9,425,562,274||
(i) 24 March 2020, The government announced the creation of a stock market stabilisation fund (KRW10.7 trillion); (ii) 16 November 2020, State-owned Korea Development Bank announced an investment of KRW800 billion into the parent company of Korean Air Lines to help fund its KRW1.5 trillion takeover of Asiana Airlines.
|05 - Health and income support||KRW82,900,000,000,000||USD67,946,009,783|
|05A - Health support||KRW2,100,000,000,000||USD1,721,189,633||
(i) 17 March 2020, The National Assembly approved the budget of KRW2.1 trillion for disease control, i.e., epidemic prevention and treatment, support for medical institution and quarantined people; (ii) 14 April 2020, No amount/estimate: Temporary elimination of import tariffs on surgical and sanitary masks and melt blown filters until 30 June 2020; (iii) No amount/estimate, 29 June 2021, (a) The Republic of Korea has already agreed to buy 106 million doses of mRNA vaccines from Pfizer and Moderna to cover full vaccination of its population of 52 million this year. The government is also hoping to achieve herd immunity earlier than its November target by inoculating at least 70% of its population with a minimum of one vaccine dose, (b) Large manufacturing employers have received permission from the country's health authorities to administer COVID-19 vaccines at in-house clinics, hoping to speed up inoculation of their employees; (iv) No amount/estimate: 6 July 2021, The Republic of Korea will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in a bid to speed up immunization amid a surge in infections around the capital Seoul.
|05B - Income support||KRW37,900,000,000,000||USD31,063,374,798|
|05B1 - Tax and contribution deferrals and policy changes|
|05B2 - Tax and contribution rates reduction||
No amount/estimate: 2 March 2020, Reduced taxes on new car purchases for 3 months. On 5 June 2020, the measure was extended by another 6 months until end-December 2020.
|05B3 - Subsidies to individuals and households||KRW9,100,000,000,000||USD7,458,488,408||
31 March 2020, The government announced an emergency relief payment plan of KRW9.1 trillion (USD7.4 billion) to address the virus outbreak. The government plans to pay relief checks to households in the bottom 70% income bracket (around 14 million households), of up to KRW1 million (USD820) per household. For this, a second supplementary budget was submitted to the National Assembly and passed on 30 April 2020.
|05B4 - Subsidies to businesses|
|05B5 - Indirect income support|
|05B6 - No breakdown (income support)||KRW28,800,000,000,000||USD23,604,886,390||
(i) February 2020, The government announced emergency support of KRW20 trillion for households and damaged industries, such as tourism and export industries; (ii) In 17 March 2020: The National Assembly approved (a) loans and guarantees for small businesses, indirect support of wage and rent for small merchants (KRW4.1 trillion), (b) consumption coupons for the poor, emergency family care and employment retention support (KRW3.5 trillion), and (c) support for issuing local gift certificate, local government grants for infection prevention (KRW1.2 trillion); (iii) see Measure 5B3; (iv) No amount/estimate: Some local governments have announced cash support for people (a) Gyeonggi province announced KRW100,000 (USD82) to all residents, and (b) Seoul and Daejeon have a similar plan without specific criteria.
|05C - No breakdown (health and income support)||KRW42,900,000,000,000||USD35,161,445,352||
(i) 3 July 2020, the National Assembly approved the third supplementary budget worth KRW35.1 trillion with KRW23.7 trillion in new spending and KRW11.4 trillion revenue adjustment and support tax reductions; (ii) 11 September 2020, The government drafted a fourth supplementary budget worth KRW7.8 trillion, including cash payments to small businesses and self-employed workers, which was subsequently approved by parliament.
|06 - Budget reallocation info_outline|
|07 - Central bank financing government||KRW15,500,000,000,000||USD12,704,018,717|
|07A - Direct lending and reserve drawdown|
|07B - Secondary purchase: government securities||KRW15,500,000,000,000||USD12,704,018,717||
The Bank of Korea (BOK) purchased a total of KRW11 trillion worth of treasury bonds in 2020 for financial market stability. As of 10 June 2021, The BOK purchased KRW4.5 trillion worth of treasury bonds in total on three occasions: on 9 March 2021 (KRW2 trillion), 28 April 2021 (KRW1 trillion), and 3 June 2021 (KRW1.5 trillion).
|08 - International Assistance Received||KRW73,205,181,818,182||USD60,000,000,000|
|08A - Swaps info_outline||KRW73,205,181,818,182||USD60,000,000,000||
The BOK opened a USD60 billion bilateral swap line with the United States Federal Reserve (US Fed) with a peak outstanding amount of USD18.787 billion on 24 June 20202. On 29 July 2020, The US Fed announced the extension of its dollar liquidity swap lines and FIMA repo facility to 31 March 2021. On 16 December 2020, The US Fed announced the extension of USD swap lines for 9 central banks including the BOK to 30 September 2021.
|08B - International loans/grants|
|08B1 - Asian Development Bank|
|08B2 - Other||
No amount/estimate: 6 July 2021, The Republic of Korea will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in a bid to speed up immunization amid a surge in infections around the capital, Seoul.
|09 - International Assistance Provided||KRW16,385,759,863,636||USD13,430,000,000|
|09A - Swaps info_outline||KRW15,233,998,336,364||USD12,486,000,000||
(i) 7 April 2020, USD7.568 billion bilateral currency swap arrrangement with Bank Indonesia; (ii) 22 October 2020, The BOK and the People's Bank of China renewed the Korean Won-Chinese Yuan Bilateral Currency Swap Arrangement and enlarged its size from KRW64 trillion to KRW70 trillion from 11 October 2020 to 10 October 2025.
|09B - International loans/grants||KRW1,151,761,527,273||USD944,000,000||
(i) Finance Minister Hong Nam-ki said the government will offer more than USD400 million to emerging nations this year for health projects against the novel coronavirus through the Economic Development Cooperation Fund, along with postponing debt payments worth USD110 million for 26 countries; (ii) 29 October 2020, The South Korean government extended a USD100 million loan for the Philippines' pandemic response through the Export-Import Bank of Korea, which has allotted USD540 million in pandemic response assistance to 14 developing countries; (iii) 9 January 2021, The Government of South Korea donated USD3 million worth of COVID-19 test kits for Sri Lanka's COVID-19 response; (iv) No amount/estimate: 9 March 2021, The government donated medical equipment to Armenia. The devices will be distributed to medical centers treating COVID-19; (v) 30 June 2021, The Government of the Republic of Korea provided walk-through virus test booths and a range of essential medical equipment worth USD1 million to support the government of Lao PDR; (vi) No amount/estimate: 12 October 2021, The Republic of Korea is donating 1.1 million and 470,000 doses of AstraZeneca vaccine to Viet Nam and Thailand [update].
|10 - No breakdown||KRW40,420,000,000,000||USD33,128,802,358||
(i) 22 April 2020, President Moon announced a key industry stabilization fund would be established for KRW40 trillion and operated by Korea Development Bank to support seven key industries (airlines, shipping, shipbuilding, autos, general machinery, electric power, and communications) through loans, payment guarantees, and investments; (ii) 11 June 2020, KRW420 billion "Win-Win Guarantee Program" for SMEs through the Technology Guarantee Fund including support of up to KRW3 billion in working capital and up to KRW10 billion in facility funds; (iii) 8 September 2020, The FSC announced the government will further develop measures under the KRW170 billion "New Deal" Initiative to be implemented in 2021-2025 and consisting of a mix of public and private sector funding, and low interest loans and special guarantees.
|11 - Other Economic Measures||
(i) 14 April 2020, Temporary export ban on surgical and sanitary masks and melt blown filters; (ii) 18 May 2020, The FSC announced various measures to improve the exchange-traded fund and exchange-traded note markets to contain overheated investment demand and mitigate excessive concentration in particular investment products; (iii) 19 May 2020, the FSC announced implementation plans on measures to improve supervision of financial conglomerates: (a) introduce a group-wide risk assessment system which combines the currently distinct risk concentration and risk transfer categories into a single comprehensive framework for assessing capital adequacy requirements; (b) begin integrated group-wide disclosure in September 2020 through which the six financial conglomerates will gather required information from their subsidiaries and provide group-wide disclosure of information on 8 sections and 25 categories, including ownership & governance structure, internal risk management procedures, financial soundness, etc.; (c) introduce a group-wide internal control system in the second half of this year by having the six financial conglomerates establish and operate their own internal control council operate their own internal control councils and standards by the end of the third quarter this year; (iv) 10 July 2020, the Finance Minister announced the government will raise real estate taxes on properties valued over KRW600 million for multiple home owners and encourage renters to unload homes; capital gains tax rates will also be increased. As of 22 July 2020, The government clarified its planned revisions to the tax code pertaining to capital gains: (a) up to 25% tax on capital gains exceeding KRW50 million a year for retail stock market investors starting 2023; (b) starting October 2021, annual gains of more than KRW2.5 million from trading of cryptocurrencies will be subject to a 20% capital gains tax for local residents; and (c) a hike in income tax on earnings exceeding KRW1 billion a year from 42% to 45%; (v) 27 August 2020, The FSC announced an extended temporary ban on short-selling of stocks to 15 March 2021.
|12 - Non-Economic Measures|
|12A - Measures affecting travel and transport (local and international)||
25 July 2021, The first travel bubble of the Republic of Korea with Saipan kicked off amid a fourth wave of COVID-19 infections. This entails quarantine-free international travel for the citizens of ROK.
|12B - Measures affecting business and workplace||
12 July 2021, Under the Level 4 social distancing in force for two weeks until 25 July 2021, performing arts venues must close at 10 PM, and the number of audience members for each performance is limited to a maximum of 5,000 with every other seat left vacant, allowing for a group of two to sit together. Cinemas must close at 10 PM, too. Museums and art galleries can receive 30% of the number they are allowed under the one person per 6 square-meter restriction.
|12C - Others||
(i) The authorities have implemented comprehensive testing and tracking, which has enabled early isolation and treatment while minimizing widespread mobility restrictions; (ii) 22 April 2020, The government unveiled a set of guidelines that communities and individuals to balance their daily lives and quarantine activities; (iii) 6 May 2020, The government ended the 2-month social distancing campaign and shifted to the so-called everyday life quarantine scheme; (iv) 2 June 2020, Authorities started testing a new quick response (QR) code system to log visitors at high-risk entertainment facilities, restaurants and churches in a bid to track coronavirus cases and prevent further spread of the disease. (v) 14 December 2020, Schools were ordered closed and shift to online learning in Seoul and surrounding areas following escalating cases; (vi) 7 April 2021, The food and drug ministry approved the Johnson & Johnson vaccine for use, while the AstraZeneca vaccine is temporarily suspended for people under 60 years old; (vii) 9 April 2021, A ban on nightly entertainment facilities will take effect for 3 weeks starting 12 April 2021; (viii) 20 June 2021, The government announced that social distancing rules will be relaxed and private gatherings of up to six people, from the current four, in the greater Seoul area will be allowed starting 1 July 2021; (ix) 4 July 2021, The Republic of Korea reversed a decision to relax mask rules in the capital Seoul and its metropolitan area after a spike in COVID-19 cases, driven by people in their 20s and 30s and the rapidly spreading Delta variant. Masks will be compulsory for everyone, including those who have been vaccinated; (x) 25 July 2021, The Republic of Korea will tighten social distancing rules: (a) The curbs will be increased to Level 3 on a four-level scale for most areas except for some small counties, which will mean a 10 PM dining curfew and ban on gatherings of more than four people from 27 July 2021 for two weeks; and (b) The highest distancing measures of Level 4 in the Seoul metropolitan area will be extended for another two weeks through 8 August 2021. The toughest distancing restrictions ban gatherings of more than two people after 6 PM and place a 10 PM curfew on restaurants and cafes, and a ban on nightclubs and other entertainment venues; (xi) As of 13 August 2021, the authorities extended its social distancing curbs for two weeks to ward off a surge in coronavirus cases, while allowing vaccinated people some latitude. As part of the extended restrictions, authorities will require restaurants and cafes in the metropolitan area to close an hour earlier at 9 PM until 5 September 2021; (xii) 12 September 2021, The Republic of Korea is seeking to have more patients with less severe COVID-19 symptoms stay home in a push to shift toward a more relaxed pandemic response, buoyed by progress in vaccinations. In a trial run, Gyeonggi and Gangwon provinces have been placing some of their patients under home care since late August 2021. So far, the Republic of Korea has isolated and treated all patients with confirmed COVID-19 either at hospitals or at nonhospital facilities called “community treatment centers” for those with mild or no symptoms; (xiii) 1 October 2021, The Republic of Korea has decided to maintain the current social distancing rules for two weeks.