Completely Pay back IMF Debt This Month

Korea will be free this month from the IMF management system of past 3 years and 8 months.

The Ministry of Finance and Economy revealed that Korea will pay off the stand-by loan of 6 billion dollars on Aug. 23 when we pay back the remainder of 149 million dollars to the IMF. Then Korea will be free from the IMF management system 44 months after it requested the IMF for the emergency fund and will become a creditor country.

Korea has paid total 19.5 billion dollars including the special relief fund (SRF) of 13.5 billion dollars in September 1999 and the stand-by loan at this time. Korea has been under the indirect management of the IMF as a Post Program Monitoring (PPM) country due to the 2 billion dollars of debt left over after the repayment of the SRF.

The agreed schedule with the IMF was to pay back the debt from March this year until May 2004. But the IMF requested the early repayment considering the foreign exchange holdings of Korea.

Nam Jin-Wung, the director of the international financial institution division of MFE, explained that ``the foreign exchange holding that had been reduced to 3.94 billion dollars at the time of the foreign exchange crisis has increased up to 97.06 billion dollars by the end of July. The government judged that the early repayment of the IMF loan that is a kind of special relief fund would help to increase the credibility of the country.``

By the completion of the repayment, the economic policy consultations with the IMF, which have been held 11 time since the IMF`s first financial aid, will not be held anymore. Rather, Korea will participate in the annual conference as a member country of IMF.

Park Joong-Hyun sanjuck@donga.com