S.Korea to support firms to offset damage of Ukraine crisis

South Korea is set to provide financial support of up to $1.7 billion to exporters in a move to minimize the impact of the escalating crisis in Ukraine as the Asian country will join multinational economic sanctions against Russia in response to the military attack on its neighbor.

The government plans to draw up an emergency financing program worth 2 trillion won for exporters hit by the crisis, although the amount is flexible depending on the situation. It is also poised to provide trade finance support to these exporters.

The authority is to closely monitor energy supply and demand, as well as financial markets, to be ready to immediately implement measures to deal with the impact of the crisis.

President Moon Jae-in on Friday told his staff to check the situation every day and take preemptive steps since the crisis is expected to hurt Asia’s fourth-largest economy.

Major companies such as Samsung Electronics Co. and Hyundai Motor Co. are concerned over rising costs with oil prices topping $100 a barrel for the first time since 2014. That also added to worries about inflation. Sanctions against Russia are also expected to disrupt the supply of components for manufacturers that operate plants there.

TO JOIN GLOBAL MOVE TO STABILIZE ENERGY MARKETS

South Korea decided to join global efforts to stabilize the energy supply, cooperating with measures such as a combined release of additional oil from the world’s strategic crude reserves. Russia is the world’s second-largest oil producer.

The country also plans to buy more spot cargoes of energy resources and expand imports from Australia. For other raw materials, it will seek diversification of supply sources and up production from domestic companies.

The government sees limited impact from the crisis on the local economy in the near term, considering its trade volume with Russia and Ukraine, as well as its stocks of raw materials and grains.

Meanwhile, South Korea reiterated that it is not considering adopting unilateral sanctions.

"It's not an era where we can do something independently," Park Soo-hyun, senior secretary for public communication, told a local radio station. “The government must consider the growing trade with Russia, as well as our companies and people there.”

Write to So-Hyeon Kim and Do-Won Lim at alpha@hankyung.com
Jongwoo Cheon edited this article.