South Korea To Repay IMF Loans
SEOUL, South Korea (AP) _ South Korea will repay the balance of loans drawn from the International Monetary Fund by the end of August, four years after it sought a bailout from the 1997-1998 Asian financial crisis, the nation’s central bank said Saturday.
South Korea will pay $500 million Monday in the first installment to reimburse the $5.8 billion it still owes to the IMF, the Bank of Korea said in a news release.
The IMF and South Korea have agreed that the country now has enough foreign exchange reserves to start repaying the debt ahead of the scheduled deadline of May 2004.
South Korea’s once-depleted foreign exchange reserves reached a record $96.2 billion at the end of last year and are increasing by $400 million to $500 million every month, the bank said.
The country asked the IMF to put together a record $58 billion bailout package in late 1997. The World Bank, the Asian Development Bank, the United States and other countries also contributed to the package.
South Korea has drawn $29.9 billion from the offered package.
The nation’s economy turned around in late 1998 and it began repaying the loans. It had repaid $13.4 billion to the IMF by September 1999.
But it still owes $5.8 billion to the IMF and a combined $10.7 billion to the World Bank and the Asian Development Bank. The country also took on additional debt when it issued $4 billion in overseas bonds to fatten up its foreign exchange reserves.
The central bank did not say when it plans to reimburse the other lenders. South Korea wants to repay the IMF loans quickly, as they bear higher interest rates than those from the World Bank and Asian Development Bank.
South Korea’s economy grew an average 7.5 percent a year from 1990 until 1998, when it shrank 5.8 percent in the wake of the Asian financial crisis. The economy rebounded in 1999, growing 10 percent. The country’s growth was estimated at 9 percent in 2000.