Ruling, opposition lawmakers unanimously raise Korea Eximbank’s capital limit

Korea Eximbank’s President Yoon Hee-sung says during a National Assembly audit session held at the bank’s headquarters. [Photo by Yonhap]

The maximum legal cap on the loans and guarantees provided by the Export-Import Bank of Korea (Korea Eximbank) on government-backed exports is expected to increase as it is criticized for standing in the way of Korea’s secondary defense exports to Poland, which is estimated to exceed 30 trillion won ($22.28 billion).

“Increasing the capital limit of Korea Eximbank is the right thing to do,” the bank’s President Yoon Hee-sung said during a National Assembly audit session held at the bank’s headquarters in Seoul on Tuesday. Yoon emphasized that increasing the bank’s statutory capital limit would expand the capacity for policy financing support for exporters and strengthen the bank’s role as a market safety valve. “We can then respond in a timely manner as the defense industry becomes more significant and the demand for policy finance increases.”

There was no disagreement among ruling and opposition lawmakers on expanding Korea Eximbank’s capital limit and a bill to increase the bank’s statutory capital limit from the current 15 trillion won to up to 35 trillion won is currently pending in the National Assembly. If passed, the bill is expected to provide breathing room for supporting exporters.

“As of March 2023, Korea Eximbank’s paid-in capital stood at 14.8 trillion won, with a utilization rate of 98.5 percent,” according to Representative Yang Ki-dae of the Democratic Party who proposed the bill. “Korea Eximbank has been tied to the 15 trillion won limit for nearly a decade since 2014.”