The government of South Korea is to guarantee foreign-currency borrowing by the country's banks for three years to help stabilise financial markets.
The finance ministry, the central bank and the financial services commission said about $US100 billion of borrowing would be covered by the package.
The government will also provide $US30 billion of liquidity to banks, and there will be more aid to small businesses.
South Korea's economy is the third largest in Asia and 13th in the world.
However, the BBC reports it is particularly vulnerable to the global credit crisis because its banks lacked sufficient dollars to service maturing foreign debt.
In a statement, the government said it would guarantee for three years all external debt taken on by South Korean banks before 30 June 2009 in order "to avoid placing domestic banks at a comparative disadvantage in terms of overseas funding and to allay fears in the financial market".
A further $US750 million will be injected into the Industrial Bank of Korea, so it can expand lending to small businesses.
