Government to ease financial regulations in the face of new high exchange rates

[Anchor]

The won-dollar exchange rate, which has become the biggest variable for our economy, has once again set a new annual high.

As of the market close today (Dec. 23), the exchange rate is 1,452 won to the dollar.

After surpassing 1,450 won on the 19th, marking the highest level since the global financial crisis in March 2009, it has remained above 1,450 won for three consecutive trading days.

The problem is the prevailing outlook that the high exchange rate will continue for the time being due to domestic political instability.

Although the government has stated it will respond with strong market stabilization measures, concerns in the industrial sector are significant.

In particular, the petrochemical industry is deeply troubled as it has to deal with issues such as "oversupply" and "increased raw material costs".

Reporter Kim Ji-sook has the story.

[Report]

The Yeosu petrochemical complex, which led the development of the domestic economy.

This year, leading companies such as LG Chem and Lotte Chemical have halted their factory operations.

This is due to China, which was once the largest importer of our products, has now become the largest exporter, and the Middle East is also making aggressive investments.

[Shin Hak-cheol/LG Chem Vice Chairman & President of the Korea Chemical Industry Association/July: "In particular, China has been continuously improving its production capacity for basic petrochemicals like ethylene..."]

To make matters worse, there is significant pressure from rising production costs, and importing raw materials like naphtha in dollars makes the soaring exchange rate even more burdensome.

Three out of the four major petrochemical companies have been unable to avoid losses into the third quarter of this year, and one of the leading companies, Lotte Chemical, faced a liquidity crisis and even put up the iconic Lotte World Tower as collateral.

The government has urgently proposed a restructuring plan.

It promised to ease regulations related to sales, mergers and acquisitions, and facility closures, as well as to provide tax and financial support.

It will allow for a shift in business structure from focusing on quantitative growth to producing high-value-added and eco-friendly products, and will also support research and development.

[Ahn Duk-geun/Minister of Trade, Industry and Energy: "We will supplement the Corporate Vitality Act to quickly implement business restructuring in oversupply sectors and resolve various difficulties faced by companies."]

The industry welcomed the somewhat delayed measures but urged for swift implementation.

The government stated that it would announce follow-up measures around the first half of next year after the industry's self-rescue efforts are made.

This is KBS News, Kim Ji-sook.