Gov't to lend $5 bil. from forex reserves to dollar-strapped firms

+

TOKYO, March 3 Kyodo -
The government will provide $5 billion from its approximately $1 trillion in
foreign reserves later this month to Japanese companies having trouble raising
dollar funds through the state-backed Japan Bank for International Cooperation,
Finance Minister Kaoru Yosano said Tuesday.
''We need to ensure smooth financing for Japanese firms operating both in Japan
and overseas, as economic conditions get more severe toward the end of the
current business year'' on March 31, Yosano told a press conference.
''As an unusual and extraordinary measure, we will lend funds from foreign
reserves to JBIC so that the money can supplement the bank's fund procurement
activities'' and be extended to Japanese companies, the minister said.
JBIC, under the wing of government-owned public lender Japan Finance Corp., has
been implementing an emergency program since late last year to provide loans
and debt guarantees for Japanese companies operating overseas that are facing
difficulty raising funds.
The fresh funds from foreign reserves are expected to bolster the bank's
operations.
Finance Ministry officials said the government will offer five-year loans to
JBIC using funds from foreign reserves, and that the amount to be extended in
April and later will be decided after consultations with the bank based on the
capital needs of Japanese companies.
The emergency step will be effective until March 2010 and loan rates will be
fixed later this month in view of interest rates the JBIC pays when it procures
funds from markets, they said.
Separately, Yosano said the government will consider expanding the amount of
loans to JBIC under its fiscal 2008 fiscal investment and loan program from the
current 800 billion yen to 1.2 trillion yen in case the bank needs more yen
funds.
One third of the JBIC loans are extended in yen terms. JBIC's predecessor
provided a total of $4 billion in loans to Japanese importers between 1977 and
1988 in order to reduce the country's trade surplus and narrow its external
imbalance, according to the officials.
In a related move, the minister also said the government is prepared to
increase the size of its emergency financing for corporate borrowers from 1
trillion yen to 1.5 trillion yen in the current fiscal year through March 31.
The loans to meet the growing capital needs of Japanese firms toward the end of
the business year will be provided through the state-backed Development Bank of
Japan, which was privatized in October.
==Kyodo
2009-03-03 22:32:38