## News Brief: IMF Executive Board Completes 1st Review of Korean Program: Activates Supplemental Reserve Facility

_IMF News, December 18, 1997_

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**Canonical URL:** [News Brief: IMF Executive Board Completes 1st Review of Korean Program: Activates Supplemental Reserve Facility](https://www.imf.org/en/news/articles/2015/09/29/18/03/nb9730)

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## Bibliographic details
- Published: December 18, 1997

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### Review outcome and financing made available
- The IMF’s Executive Board completed its review of Korea’s implementation of the economic program.
- As a result of completing this review, a further SDR 2.6 billion (about US$3.5 billion) is available to Korea under the SDR 15.5 billion (about US$21 billion) stand-by credit approved December 4, 1997 (see Press Release 97/55).
- The IMF had already made available SDR 4.1 billion (about US$5.5 billion) under the three-year stand-by credit.
- The total amount of financing available to Korea under the program, which remains exceptional, has not changed.

### Supplemental Reserve Facility (SRF) — terms and purpose
- The latest credit is being made available under the terms of the newly-created Supplemental Reserve Facility (SRF).
- The SRF was put into place on December 17, 1997 (see Press Release 97/59).
- Purpose: to provide financial assistance to IMF members experiencing exceptional balance of payments difficulties due to a large short-term financing need resulting from a sudden and disruptive loss of market confidence reflected in pressure on the capital account and the member’s reserves.
- Financing characteristics under the SRF:
  - Provided at shorter maturities than resources available under stand-by and extended Fund facility (EFF) credits.
  - Provided at a higher rate of charge than resources available under stand-by and EFF credits.
- The change in terms under the SRF was anticipated at the time the Korean program was drawn up and is reflected in Korea’s Letter of Intent.

### Korean policy actions and IMF assessment
- Quoted statement by Michel Camdessus, Managing Director of the IMF:
  - "The Korean authorities are moving swiftly to implement the economic program approved by the IMF on December 4, 1997."
  - Actions cited:
    - The interest rate ceiling is being raised.
    - The won is now freely floating.
    - Important actions have been taken on the fiscal front.
    - Action plans for restructuring the financial sector, constituting the cornerstone of the program, are proceeding.
  - The IMF "looks forward to continued close cooperation with the authorities in this critical area."

### Key statistics and references from the brief
- SDR 2.6 billion (about US$3.5 billion) newly available.
- SDR 15.5 billion (about US$21 billion) total stand-by credit approved December 4, 1997.
- SDR 4.1 billion (about US$5.5 billion) already made available under the three-year stand-by credit.
- SRF establishment date: December 17, 1997.
- Related press releases: Press Release 97/55 and Press Release 97/59.

*International Monetary Fund — News Brief, December 18, 1997.*

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## References

- [Republic of Korea and the IMF](http://www.imf.org/external/country/KOR/index.htm)
- [News Briefs](https://www.imf.org/en/news/searchnews)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/29/18/03/nb9730_