Export support increased to a record 351 trillion won

President Yoon Suk-yeol tours the Busan New Port in Changwon, South Gyeongsang, on Wednesday. President Yoon announced the governemnt's plan in supporting Korean export and import companies. [YONHAP]

Export support is being increased by the government as the country battles a trade deficit and a weak currency.

The ceiling on trade finance, which includes insurance, loans, bonds and guarantees, will be raised to a record-breaking 351 trillion won, up from 300 trillion won.

It was raised from 261.3 trillion won to 300 trillion in July.

An export support plan was announced on Wednesday in Changwon, South Gyeongsang. The initiative will be led by the Ministry of Trade, Industry and Energy.

“Despite record exports, our prospects won’t be that good in the second half,” President Yoon Suk-yeol said. “We plan to expand trade finance to a record of 350 trillion won.”

He also emphasized the government's full support of Korean companies involved in trade, including logistics and marketing companies.

"The government will actively support companies to innovate technology, pioneer markets and invest in businesses with high value added through sufficient capital support from state-owned financial institutions," Yoon said.

Much of the increase is the result of the government increasing the annual cap for Korea Trade Insurance Corporation insurance from 210 trillion won to 260 trillion won.

With the insurance limit raised, companies will be able to borrow more.

The Export-Import Bank of Korea's ceiling is 74 trillion won, while the combined limit for the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation is 16.8 trillion won.

Korea SMEs and Startups Agency's limit was raised from 400 billion won to 530 billion won.

The Export-Import Bank of Korea will temporarily lower interest rates a maximum of 1 percentage points for a year.

The government estimates that about 1,000 companies will benefit from the change.

It increase the number of items eligible for trade insurance until the end of the year.

Guarantee periods will be extended from 1 year to three years for companies in innovative or new industries.

The government announced that it will be providing 9 billion won of export logistics support to SMEs, including a 15 percent discount on cargo shipped by air. It estimates about 750 companies will benefit from the aid.

The country reported a trade deficit for four straight months for the first time since the global crisis in 2008.

The biggest factor in the increasing deficit is energy prices, with imports of fuels up about 89 percent.

Due to declining demand, semiconductor prices have been falling, while energy prices remain high amid the ongoing war in Ukraine.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]