South Korea guarantees foreign loans

It enjoys major export success in a number of manufacturing industries, but especially shipbuilding, car-making, and electronics.

However, analysts say the country has appeared particularly vulnerable to the global credit crisis because its banks lacked sufficient dollars to service maturing foreign debt.

In a statement, the government said it would guarantee for three years all external debt taken on by South Korean banks before 30 June 2009 in order "to avoid placing domestic banks at a comparative disadvantage in terms of overseas funding and to allay fears in the financial market".

Along with the Bank of Korea, it will also provide an additional $30bn of dollar liquidity to the banks by utilising foreign exchange reserves.