South Korea will provide 300 billion won (US$253.5 million) in emergency loans to local budget carriers, which have been suffering from the economic fallout of the spread of the new coronavirus, Finance Minister Hong Nam-ki said Monday.
Budget carriers will also be exempted from paying airport usage fees, Hong told a meeting with economy-related ministers earlier in the day.
South Korea's tourism and aviation sectors are expected to take a harder hit from the COVID-19 virus outbreak, as a large proportion of visitors come from China.
More than 80 percent of flights between South Korea and China have been halted or cut due to concerns over the spread of the virus.
The government will set up a fund of 60 billion won to help support the nation's shipping industry, Hong said.
The government will encourage banks to offer 50 billion won in loans with an annual interest rate of 1 percent to small tourism companies, Hong said.
The country has reported 29 confirmed cases of the virus so far, with nine patients fully recovered from the illness.
With uncertainty lingering about the peak of the coronavirus, which has killed more than 1,700 people and infected 70,000, mostly in China, South Korea is stepping up efforts to minimize the economic impact of the disease.
The government said it will provide 20 billion won worth of loans with lower interest rates and guarantees worth 100 billion won with preferable conditions.
Hong and the ministers also discussed countermeasures against Japan's export curbs.
The Japanese restrictions have had no visible impact on South Korea's production of semiconductors and displays so far, Hong said, calling for Tokyo to swiftly lift the export curbs.
Last July, Tokyo imposed tighter regulations on exports to Seoul of three materials that are critical for the production of semiconductors and flexible displays -- resist, etching gas and fluorinated polyimide.
Japan later removed South Korea from its list of trusted trading partners.
South Korea views the Japanese moves as retaliation against South Korean Supreme Court rulings ordering Japanese firms to compensate South Korean victims of forced labor during Japan's 1910-45 colonial rule of the Korean Peninsula. (Yonhap)