South Korean IMFDate | 02.11.1997 |
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Duration | 1997-2001 (3 Year) |
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Location | South Korea |
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It was a case in November 1997 under the Kim Young-sam administration that Korea received funding from the International Monetary Fund (IMF) due to a lack of foreign exchange. |
The South Korean International Monetary Fund Agreement was implemented when South Korea, which was in a foreign exchange crisis, signed a memorandum of understanding with the International Monetary Fund on December 3, 1997.[1] The country's chaebols, or large conglomerates, had engaged in poor business management and overborrowing, and the government had been supporting the chaebols' financial practices when the Asian financial crisis began.[2] The IMF required the introduction of a range of policies (such as fiscal and financial austerity, high-interest rates, the dissolution of the chaebols, layoffs, and implementation of floating exchange rates) as conditions for the bailout. The South Korean government under Kim Young-sam accepted those conditions to stave off a crisis.[3] As a result, corporate bankruptcies, mass unemployment, and a crisis in the real economy accelerated.