FROM THE OFFICE OF PUBLIC AFFAIRS

South Korea and the International Monetary Fund (IMF) reached an agreement today on an economic reform program that commits Korea to important policy adjustments aimed at restoring stability. The United States welcomes the program, which includes significant financial restructuring and measures to open Korea's financial markets to foreign participation and improve corporate governance as well as important macroeconomic policy changes.

The program will be supported by financing from the IMF, the World Bank and the Asian Development Bank (ADB). Also, the Korean government will seek to raise financing in international private capital markets as soon as possible.

The United States, along with a number of other countries from around the world, is prepared to provide additional, contingent financing to reinforce the Korean program. This support could be made available for a temporary period, if necessary, to supplement the resources made available by the International Financial Institutions and those raised on the private markets. It would be conditioned on the implementation of the appropriate set of macroeconomic and structural policies supported by the IMF, the World Bank and the ADB. The United States is prepared to provide up to $5 billion in assistance from the Treasury's Exchange Stabilization Fund toward this effort.

We have a vital national economic and security interest in helping Korea to restore market stability as soon as possible. Korea is the world's eleventh largest economy and a major ally and trading partner of the United States. In this new global economy, American stability and prosperity is closely linked with the stability of the international financial system and the strength of our trading partners.