S. KOREAN MARKET FALLS AGAIN BANK BAILOUT GIVES AILING CURRENCY A LIFT.

Byline: Kyong-Hwa Seok Associated Press 

South Korea's beleaguered stock market tumbled again this morning, a day after the president-elect said the country might not be able to pay its bills.

But the Korean currency, the won, rose back against the dollar following news that the World Bank had approved an immediate $3 billion loan to South Korea.

The market remained jittery following Tuesday's sharp sell-off, which knocked 7.5 percent off the benchmark Korean Composite Stock Index - its sharpest loss ever. By the midday break today, the index was off 9.39 points, or 2.56 percent, at 356.97.

``The market is again plunging on unstable financial market conditions,'' said Kim Se-jung, an analyst at Dongwon Securities Co.

The won recovered to 1,830 to the dollar by midday, a rise of 7 percent from the day before. In late Tuesday trading, it took 1,965 won to buy one U.S. dollar.

The pullback Tuesday was prompted by another lowering of the nation's credit rating, which put further pressure on Korea's chances of obtaining new bank loans or keeping foreign investors in its financial markets.

It also raised questions about whether a $57 billion bailout arranged by the International Monetary Fund will be enough to stem the crisis.

``The reality is that we have no money,'' President-elect Kim Dae-jung said after discussions with top U.S. officials. ``We don't know if we can manage tomorrow or the day after. I worry about this day and night.''

The 181-nation World Bank, acting with unusual speed, approved a $3 billion immediate loan to South Korea late Tuesday. That followed a decision last week by the Asian Development Bank to provide a $4 billion loan.

The World Bank acted quickly because of concerns that a default by South Korea would ripple through the world economy, particularly threatening the weakened Japanese banking system. The fear is that shocks to the world's second-biggest economy could spread to other major economies like the United States.

The two loans are part of the IMF bailout, but are expected to provide more immediate financing to help Korea meet its short-term debts of $15 million due by year's end.

But the country has an additional $1 billion due in January, and debts maturing in the next 12 months total around $100 billion.

``Unless you can persuade commercial banks and other lenders to roll over the debt, $57 billion from the IMF is not going to be enough,'' said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis.

Standard and Poor's lowered South Korea's long-term credit rating four notches, putting it even deeper into the junk-bond ranks than Moody's Investors Service had the day before. The new rating is on a level with countries such as Pakistan and the Dominican Republic.

The downgrades hurt the stock market directly because many investment funds that aren't allowed to invest in countries with such low ratings had to sell Korean holdings.

``We just don't have enough dollars,'' said Choe Seung-wook, an analyst at J. Henry Schroder Ltd. ``Korea is now standing in the road between bankruptcy and recovery.''

Lee Kyung-shik, governor of the central Bank of Korea, flew to Tokyo on Tuesday to appeal to Japanese banks to continue to roll over $12 billion lent to South Korean banks.

Japanese banks collected $8 billion in recent weeks, depleting South Korean foreign reserves. As of Dec. 11, the nation had $10 billion in usable foreign reserves.

Responding to the nervous reaction to the president-elect's comments, Kim's political party said he did not mean he expects a national default in the next few days, but was merely trying to emphasize the gravity of the financial crisis.

In return for the IMF loan package, the country must cut government spending, lower economic growth for 1998 to 2.5 percent, raise interest rates and clear up financially shaky banks and conglomerates.

Analysts say those measures would cost up to a million jobs.