South Korea's central bank said Thursday that it will offer 650 billion won ($587 million) in soft loans to business sectors hit hard by the outbreak of Middle East Respiratory Syndrome.

Since the report of the first case on May 20, MERS has claimed 23 lives and infected 165 people, with more than 6,700 others put under quarantine. Local think tanks and foreign investment banks have warned the outbreak will adversely affect some sectors and hurt overall economic growth.

The Bank of Korea said support will target the tourism, hospitality and private education sectors as well as hospitals and clinics, with the funds to be made available starting July 1. The loans will carry an interest rate of 0.5-1 percent

"The money can be borrowed by small businesses with low credit ratings and no viable means to generate funds," a BOK official said. "Depending on the spread of MERS, more loan support will be extended."

The announcement comes after the finance ministry said earlier in the week that it will provide 400 billion won in emergency support to all small and medium enterprises affected by the MERS scare.

On Thursday, government ministries said that the publically run Korean Federation of Community Credit Cooperatives will make available 50 billion won to help businesses strapped for cash.

These loans will carry an interest rate of 2 percent.

Policymakers also said they will allow a grace period for companies to report their aggregate income taxes that are originally due by late June.

The country's tax office, meanwhile, said that as part of its effort to help ease the MERS shock, it will hold off audits on all hospitals and clinics until the situation is brought under control.

"All hospitals and clinics regardless of whether or not they have MERS patients have been hit by a sharp drop patient numbers," the National Tax Service said. (Yonhap)