Korea to Inject 14.9 Trillion Won for SMEs Hit by High Exchange Rates
As the won-dollar exchange rate remains in the mid-1,500 won range, Korea is moving to protect small and mid-sized companies. A combined 14.9 trillion won will be supplied through loans and guarantees. FX volatility insurance will also be expanded to reduce currency-loss risks for importers and exporters.
Korea will inject 14.9 trillion won in loans and guarantees for small and mid-sized companies suffering from the high won-dollar exchange rate. The measure targets firms facing heavier costs for imported raw materials, dollar settlements and working capital as the exchange rate stays in the mid-1,500 won range.
Cost Pressure From a Weak Won
A won-dollar rate in the mid-1,500s raises costs directly for manufacturers, importers and trading firms. Oil, gas, metals, grains and parts priced in dollars become more expensive in won terms. Smaller companies have less access to hedging tools and foreign-currency funding, so their margins can deteriorate even when sales remain stable.
Loans, Guarantees and FX Insurance
The 14.9 trillion won package combines direct lending and guarantees. Loans are designed to secure working capital and ease repayment pressure, while guarantees help companies with limited collateral access bank financing. Expanded exchange-rate volatility insurance will help companies manage potential currency losses and plan cash flow around export and import contracts.
Market Impact
The program is a buffer for the real economy, not a direct tool to push the exchange rate lower. If the weak won persists, import prices and producer costs may keep rising. Companies need to review policy-loan access, guarantee limits and insurance terms before payment dates. Exchange-rate volatility is likely to remain elevated while dollar strength, interest-rate gaps, energy prices and trade flows interact.
Key points
- As the won-dollar exchange rate remains in the mid-1,500 won range, Korea is moving to protect small and mid-sized companies. A combined 14.9 trillion won will be supplied through loans and guarantees. FX volatility insurance will also be expanded to reduce currency-loss risks for importers and exporters.
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FAQ
How large is the support package?
The package totals 14.9 trillion won in loans and guarantees.
What does FX volatility insurance do?
It helps reduce losses from sharp exchange-rate moves and supports cash-flow planning for trade contracts.
Who is the main target?
Small and mid-sized companies facing higher import costs, dollar settlement burdens and foreign-currency repayment pressure.
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