SEOUL. Feb 1: South Korea's Finance Minister said today the government would hold talks with the International Monetary Fund (IMF) on lowering sky high Interest rates in the domestic money market, says Reuters..

I feel very sorry for companies. suffering from recently soaring Interest rates under the IMF programme. Lim Chang Yuel said in a panel discussion hosted by state run KBS Television.

He said the IMF had agreed to discuss the issue.

Maintaining benchmark interest rates at above 20 per cent in the bond market was one of the conditions of the nearly 60 billion IMF bailout package agreed last month.

The IMF wanted to keep rates high to attract badly needed foreign exchange into the country and stabilise the local currency market. The won lost more than half its value against the dollar last year.

But the high interest rates have been crippling for many Korean companies struggling to pay debts in an environment of slow growth and tighter credit.

In an agreement reached between the Korean government and 13 leading international banks in New York last week Korean banks can exchange their short term non-trade credits • for new government guaranteed loans with maturity to three years.

As I'm sure the currency will be stabilised in line with the New York deal, we will discuss with the IMF how to stabilise the hike in interest rates' Lim said.