SEJONG, April 1 (Yonhap) -- South Korea will step up its support for exporters struggling to compete with their Japanese rivals armed with improved price competitiveness stemming from the yen's prolonged descent, the finance ministry said Monday.
The Japanese yen fell sharply against the U.S. dollar from a high of 77.49 yen per dollar in September 2012 to 94.04 yen at the end of last month. Its recent fall is also supported by the Abe government's active monetary easing measures aimed at bolstering its economy.
A weak yen makes Japanese products less expensive in global markets, posing a challenge for South Korean exporters vying against Japanese competitors in many areas.
"The yen's descent is not having its full-blown impact on our exports yet but there are growing signs that the price competitiveness of Japanese companies is improving," the ministry said in a report.
"If the global economic recovery is delayed and the yen remains weak for a significant period of time, our concern is that it could result in hurting our exports and growth, slowing our industrial competitiveness and doing damage to small and medium-sized companies," it added.
The government will hold a meeting of related ministries and agencies once or twice every month in order to better monitor the possible impact of the yen's prolonged weakness, the ministry said.
The government will also make more liquidity available for smaller companies at lower interest rates to help them cope with damage from the yen's prolonged weakness.
To that end, the Korea Finance Corp. will launch a 100 billion won (US$89.7 million) loan program through which companies can borrow money at lower interest rates, the ministry said.
The government also plans to "flexibly" run its lending programs of state-run policy banks to "actively" cope with a possible liquidity crunch facing small and medium-sized exporters.
In addition, the state-run Industrial Bank of Korea will launch a loan program aimed at providing financial support of up to 500 million won to exporters that have difficulty in securing money to purchase imported raw materials due to currency exchange rate fluctuations.
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