Deadlines on corporate loans will be extended, and a fund to stabilize the country’s stock markets will be established as part of Seoul’s efforts to deal with the economic impact of the COVID-19 outbreak.

Under the measures, deadlines for loans taken out by small and medium-sized enterprises and small merchants will be extended by more than six months. In addition, debtors will be given six-month extensions on their interest payments.

According to the government, the measures -- including low-interest loans for small businesses -- will cost a total of 50 trillion won ($39 billion).

According to the presidential office and the financial authorities, these and other measures were decided Thursday at the first emergency conference on the economy.

“As the first measure to resolve financial uncertainties, and to prevent bankruptcies of SMEs, merchants and the self-employed, emergency financial measures worth 50 trillion won are decided,” President Moon Jae-in said at the meeting.

He said all resources available to the government had been mobilized to offer the package, which will focus on easing liquidity problems experienced by smaller companies and small merchants.

At the meeting, Moon once again stressed the importance of the speed at which government aid is rolled out, urging officials to take steps to ease regulations to facilitate the injection of funds into the market.

Following the meeting, the financial authorities announced a number of measures including plans to establish funds to stabilize the markets.

“In order so that excessive anxiety in the stock market does not contract the real economy, a fund for stabilizing the financial markets raised by the financial industry will be established,” Minister of Economy and Finance Hong Nam-ki said.

He said the fund will be in place until the markets recover.

Hong also said a separate fund will be set up with the aim of stabilizing the bond market. According to Hong, the bond market stabilization fund will be established with input from banks, securities companies and insurance providers.

Regarding the possibility of another supplementary budget, Hong said the matter will be discussed in the process of discussing responses to the COVID-19 outbreak’s economic fallout.

By Choi He-suk (cheesuk@heraldcorp.com)