South Korea proposes $6.2 bln extra budget to fight coronavirus, KRW keeps lows

South Korea’s Finance Ministry announced on Thursday, a proposed second supplementary worth 7.6 trillion won ($6.2 billion) to fund cash handouts to ease the economic impact of the coronavirus outbreak.

Key points

the new extra budget will be funded without issuing additional deficit-covering bonds, but by reallocating money from some of the existing budget for public projects and the foreign exchange stabilization fund.

The entire 7.6 trillion won will be used to pay families below the top 30 percentile of income, with some four-person households getting about 1 million won.

Finance Minister Hong Nam-ki told a briefing, “The government will make an all-out effort to respond boldly and swiftly in terms of fiscal, tax and financial policies until this crisis is over.” 

USD/KRW consolidates near weekly highs

USD/KRW saw a spike to weekly highs of 1,228.85 in early Asia and since then it has entered a phase of consolidation, as markets digest the additional economic package news from South Korea.

At the time of writing, USD/KRW trades at 1,227.55, still adding 0.23% on a daily basis.