In a bid to bolster the competitiveness of the country's exports, which form the foundation of Korea's economy, the government has introduced an additional 23 trillion won ($17.18 billion) financial support plan, building upon a prior 16.7 trillion won initiative in funds for export enterprises.

The "Comprehensive Export Finance Support Plan" comes after the fourth meeting on export strategy convened by President Yoon Suk Yeol in February.

"Korea's exports have faced a challenging situation, enduring a continued decline over the past 10 months since October," said Kim Joo-hyun, chair of the Financial Services Commission, during a meeting held at the Korea Federation of Banks headquarters in central Seoul, with local bank CEOs and heads of financial institutions on Wednesday.

"This endeavor aims to propel our exports into making a substantial leap by strategically injecting financial resources," he said.

Approximately 4.1 trillion won will be allocated to support the development of new export markets, while 18.7 trillion won will be directed towards enhancing the competitiveness of existing strategic export industries.

The FSC said that this initiative involves the active participation of commercial banks.

Five major banks — KB Kookmin, Shinhan, Woori, Hana and NongHyup — are introducing a total of 5.4 trillion won in support for export enterprises.

The scale of each bank's support varies, with Woori and Hana committing 1.5 trillion won each, Kookmin offering 860 billion won, Shinhan providing 900 billion won and NongHyup providing 600 billion won.

Bank loans will enjoy significant interest rate reductions of up to 1.5 percentage points, combined with a maximum discount of 0.8 percentage points on guarantee fees.

Companies with export projects can anticipate an annual reduction of around 50 billion won in interest and guarantee fees.

Also, a substantial sum of 11 trillion won has been earmarked to boost four key sectors — semiconductors (5 trillion won), secondary batteries (2 trillion won), the bioindustry (2 trillion won) and nuclear power (2 trillion won) — that have significant potential to impact exports overall.

The state-owned Industrial Bank of Korea is set to lower loan interest rates by a substantial margin, with up to 1.2 percentage points for the semiconductor sector and up to 1.0 percentage points for the remaining three sectors.

Additionally, a 1 trillion won loan program tailored for small and medium-sized enterprises collaborating with conglomerates that have overseas export projects and are endorsed by them has been introduced.

For these firms, the Korea Credit Guarantee Fund will increase the maximum guarantee limit to 30 billion won, and Korea Technology Finance Corporation's ceiling will rise to 20 billion won, accompanied by a 0.5 to 1.5 percentage point reduction in the loan interest rate.

Hyundai Motor Group's partners are expected to be initial beneficiaries of this support.

"Hyundai Motor Group is creating an electric vehicle factory in Georgia, the US, and there's potential for synergy if its partner firms establish operations near the new plant," said Nam Dong-woo, a director at the FSC.

A Korean trade advocacy group welcomed the extra financial assistance, calling it "timely."

"The engagement of not only state-owned financial entities but also commercial banks in this endeavor is of significant importance,” Korea International Trade Association Vice Chair Jeong Marn-ki said in a statement.

While praising the financial support plan, Jeong also expressed regret that certain issues were left out, such as allowing simultaneous guarantees from both the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation, which would allow businesses to obtain additional loans.