Question

How did korea deal with foreigncurrency crisis in 1977?

Answer 1

The crisis in Korea was not a traditional balance of payment crisis due to

excessive external debt. It was truly a liquidity crisis due to serious mismatches in

maturity, in currency, and in the capital structure in the balance sheets of the financial

and non-financial sectors of the economy. Since the crisis was a liquidity crisis, a rapid

infusion of hard currency reserves was critical more than anything else.

However, what the IMF and the Korean government agreed upon on December

3, 1997 was far from this. The total amount of money that the IMF together with other

international financial institutions offered to bail out Korea was $58.4 billion. Out of

this, $23.4 billion was reserved as a second line of defense that would be made available

to Korea by G-7 countries only if the initial amount of $35 billion contributed by the

IMF and other multilateral institutions proved inadequate.

Answer 2

Answer:

This crisis was dealt with emergency financial support provided by the International Monetary Fund (IMF). Simultaneous efforts were also made as the citizens actively contributed towards foreign loan repayment through the Gold Collection Movement.

Explanation:

If you're curious why this crisis were met, then its because of the following reasons:

- due to amidst increasing trade deficits by the Kim administration.

- poor management by financial institutions

- reckless business operations by conglomerates and many more.

HOPE IT HELPS :)