South Korea's central bank has decided to extend the maturity of yen-denominated loans temporarily as part of efforts to protect corporate borrowers from the recent surge of the Japanese currency on the Seoul market, the Korea Times reported today.

"We need emergency measures to help companies in trouble due to maturing yen-denominated loans," Kim Yoon-chul, a senior official of the central bank's International Department, told the daily.

"We've decided to extend the maturity of the loans, temporarily, to safeguard indebted companies from the yen's surge," he added.

However, the official said the measure doesn't mean that the central bank will ease rules on the borrowing of foreign currency-denominated loans, stressing that indebted firms will be under tighter scrutiny.

The Bank of Korea (BOK) in January scrapped regulations barring banks from providing foreign currency loans to non-manufacturing firms in a bid to spur their investment in facilities. Until then, it had made it impossible for non-manufacturing firms to get such loans in an effort to ease the firms' exposure to currency fluctuations.

The won has lost ground sharply recently, causing headaches to the central bank and firms that borrowed yen-denominated loans as well.

The Korean currency closed at 1,006.56 won against 100 yen last Friday, while the exchange rate between won and yen was 890 won to 100 yen at the end of last year.