Some of the credit would be used to provide loan payment guarantees for local retailers and to buy bonds issued by credit card firms and other short-term lending institutions to ease a severe credit crunch, the statement said.Last week, Daewoo Research Institute, a local think-tank, said domestic consumption during the first half of this year plunged 28 per cent froma year ago, the steepest drop among Asian countries hit by a foreign exchange crisis.South Korea's move to jump-start the economy by encouraging domestic spending was a reversal of tough austerity measures put in place after the nation received a $58.35 billion bailout from the International Monetary Fund last year.