Large firms call on BOK to maintain expansionary policy: survey

SEOUL, July 21 (Yonhap) -- Despite encouraging signs in South Korea's corporate
finance markets, major companies say they would like the Bank of Korea (BOK) to
maintain its current expansionary policy "for some time to come," a private
survey showed Tuesday.
The quarterly survey of the nation's top 600 companies in terms of revenue,
conducted by the Federation of Korean Industries, supported the view that the
central bank is not likely to increase its record-low interest rate anytime soon.

The survey found that 47.9 percent of firms surveyed insisted that South Korea
"needs to keep its expansionary monetary policy for some time to come because the
outlook for an economic recovery remains cloudy."
Another 17.6 percent requested that the government make it easier for them to
receive financing for exports and imports.
As for corporate funding in the second quarter of this year, 29.6 percent said
that conditions had eased, whereas 13.4 percent saw a deterioration. The
remaining 57 percent said conditions were similar to those in the first quarter.
"While corporate finance improved a bit, firms with lower credit ratings are
still facing tight funding conditions," the federation said in a statement.
"So, it's important to maintain an expansionary policy until the economy fully
recovers," it said.
Helped by the government's stimulus packages, South Korea's economy barely
averted a technical recession in the first quarter. The economy grew 0.1 percent
in the January-March period, after shrinking 5.1 percent from the fourth-quarter
of last year.
Early this month, BOK Governor Lee Seong-tae kept the benchmark interest rate
unchanged at 2 percent.
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