HM Treasury News Release
154/97                                          3 December 1997
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                 UK BACKS KOREA IMF PROGRAMME 

The UK Government fully supports the programme of economic and
financial reform announced today by Korea in agreement with the
International Monetary Fund (IMF), Chancellor Gordon Brown said
today.

The Chancellor said :

"The UK Government fully supports the IMF programme which has
been agreed by  Korea. This programme will involve approximately
$21 billion of IMF finance, along with financing from the World
Bank and the Asian Development Bank.  

"In addition, the UK, together with a number of other countries,
has agreed to consider the provision of further financial support
for Korea.  This will be made available only  if unanticipated
circumstances create the need to supplement resources provided
by the International Financial Institutions, while Korea remains
in compliance with the IMF arrangements. The UK is willing to
consider a contribution of up to $1.25 billion.

"Agreement with the IMF on Korea's programme of reform marks an
important step in restoring confidence in Asia, and in helping
safeguard the stability of the world financial system. 

"As a major IMF shareholder, the UK believes that acting with the
support of the IMF is the right way for the Korean authorities
to have handled their financial situation. And as a major World
Bank shareholder we support its crucial role in restructuring the
financial sector of the Korean economy.
 
"As an open economy, the UK benefits from substantial trade and
investment flows with Asia and the rest of the world. Global
financial stability is crucial if we are to deliver sustained
economic prosperity and job creation at home.  

"We have a strong national interest in working with our
international partners and the IMF to help Korea reform its
economy and overcome its present financial difficulties. I
welcome today's announcement."





NOTES TO EDITORS

1.   The UK response to the outcome of negotiations was
     announced to Parliament in reply  to a question from
     Stephen Timms (East Ham) The text of the Chancellor's reply
     is attached. 

2.   Media enquiries should be addressed to Charles Keseru on
     0171 270 5188. 

3.   This press release and other Treasury material are also
     available on the internet at http://www.hm-treasury.gov.uk.

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Stephen Timms (East Ham) : To ask Mr Chancellor of the Exchequer
if he will make a statement on negotiations between the IMF and
Korea



Chancellor of the Exchequer

I am pleased the Managing Director of the IMF has reported today
agreement with the Korean authorities to a strong programme,
which he will recommend to the Board of the IMF.  

If the programme is agreed, the UK is prepared with some of our
European and other G7 partners to consider, if needed,
supplementary finance in support of the programme.   The UK would
consider an amount up to the equivalent of $1.25 billion.  

Any loan would depend on a financing need and would only to be
made with agreement by the IMF. Were such a loan to be made it
would be advanced by the Bank of England to the Central Bank of
Korea. The Treasury would provide to the Bank of England an
indemnity under the 1983 International Monetary Arrangements Act.