(Bloomberg) -- South Korea is continuing with efforts to ease strains in its credit market, with local financial firms making a second round of contribution to a key bond stabilization fund redeployed in October. 

The companies will inject an additional 5 trillion won ($3.7 billion) into the fund between December and January, according to the Finance Ministry. The Bank of Korea will provide as much as 2.5 trillion won of liquidity via repo transactions to participating firms, Finance Minister Choo Kyung-ho, Bank of Korea Governor Rhee Chang-yong, and heads of financial regulators said at a joint press conference on Monday. 

The move is part of an already-announced government aid program worth more than 50 trillion won to arrest the worst run-up in money market yields since the global financial crisis. While authorities have taken steps to reduce the turmoil caused by a developer’s surprise default in September, BOK’s Rhee has said that the stress is confined to a specific market segment and there’s no need yet to reactivate a pandemic-induced support mechanism. 

Authorities will also seek additional measures for lower-rated corporate notes related to real estate project finance and construction sectors, as well as commercial paper with an A2 rating, according to the finance ministry.   

In addition to the stabilization fund, authorities also have relaxed the collateral standard for securities used in repo transactions with the central bank and asked companies to refrain from selling new bonds. Financial institutions have already paid 3 trillion won into the fund. 

Yet even with these measures, yields on three-month commercial paper have continued their ascent. They touched a fresh 13-year high on Monday, although the pace of increase is set to be the slowest since September, Bloomberg-compiled data show. 

--With assistance from Shinhye Kang.

(Updates with chart and other details)

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