By mid-December, bankers, central bankers, governments, the IMF, were increasingly worried that Korea was on the point of financial collapse. Its banks were weighed down by excessive short-term foreign-currency debt; its hard-currency reserves were on the point of exhaustion. Worryingly, the $57 billion multilateral government and IMF aid package hammered out in November had failed to stop the haemorrhaging of liquidity, confidence and credit.
Senior figures in the US treasury privately told bankers that they had fully expected the IMF agreement and the promise of $57 billion in aid to shore up confidence among foreign creditors to Korea sufficiently for the country immediately to return to the international bond markets to raise new money.
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