TOKYO, Oct 27: The G7 club of rich nations pledged on Monday to cooperate to bring stability to battered global markets, where stocks buckled on fears government action will be too late to prevent a worldwide recession.

It came hours after the International Monetary Fund announced rescue plans for Ukraine and Hungary, two nations hit hard by the financial crisis that is wreaking havoc on world markets.

The Group of Seven nations -- comprising Britain, Canada, France, Germany, Italy, Japan and the US -- sought to calm nerves by affirming their “shared interest in a strong and stable international financial system.”

“We continue to monitor markets closely and cooperate as appropriate,” the statement from their finance ministers and central bank chiefs said.

At the same time, they voiced concern about “excessive volatility” in the value of the yen, which Friday soared to a 13-year high against the dollar as worried investors unwound positions in the Japanese currency.

On Sunday, the IMF said it would lend $16.5 billion to Ukraine and would announce a “substantial” package for Hungary in the next few days.

The Ukraine programme “is focused on the essential upfront measures needed to maintain confidence and economic and financial stability,” Strauss-Kahn’s statement said.

“The policies Hungary envisages justify an exceptional level of access to Fund resources,” he said, adding the package would include contributions from the IMF, European governments and other partners.

South Korea meanwhile announced its biggest-ever interest rate cut -- the Bank of Korea reducing its key rate by 75 basis points to 4.25 per cent -- and said it would push for big tax cuts and spending increases to better protect its export-driven economy from falling global demand.

President Lee Myung-Bak insisted the nation would not face a repeat of the 1997-98 financial crisis, after the local stock market last week suffered its biggest weekly decline and the won plunged to a 10-year low.

In Japan, Prime Minister Taro Aso announced fresh measures to support the stock market, including boosting a government fund to pump capital into banks if needed.

Aso said Japan would also tighten restrictions on short-selling -- selling shares in order to profit later from an anticipated fall in prices. He did not specify the amount of new money to inject into banks.—AFP