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Lee Kyung-min

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Economy

Record-low interest rate to push down mortgage rate

People seeking to take out loans stand in front of a teller at a branch of Shinhan Bank in Seoul, May 18. Korea Times fileBy Lee Kyung-min Borrowing costs for households including mortgages will decrease starting today following a record-low key base interest rate set by the central bank.The Bank of Korea (BOK) lowered its benchmark rate by a quarter percentage point to a record low of 0.50 percent, May 28 and after the decision, the central bank said the country's economy will contract 0.2 percent in 2020.The already low 2-percent borrowing rate could fall to as low as 1.85 percent, a level set by the government in 2019 to help borrowers switch their adjustable-rate loans to lower fixed-rate ones following a steady decline in the key base rate over the past few years.The adjustable rate that tracks the Cost of Funds Index (COFIX) will drop in stages, following decline in interest on savings account. The level of decrease depends on when the borrowing request was granted.The benchmark lending rate for mortgages, COFIX is widely used to determine lending rates here, and is measured by

May 31, 2020By Lee Kyung-min
Record-low interest rate to push down mortgage rate
Economy

US-China tension to continue through Nov.

'Sandwiched Korea to see elevated financial market volatility' By Lee Kyung-min The recent re-escalation of the drawn-out trade feud between the U.S. and China will continue as neither of the world's two largest economies will give up in the hegemony-oriented power struggle spilling over to technology and financial markets, experts said Monday.Bolder, more politically charged rhetoric is expected from the U.S. until its presidential election in November, and the fight will fast lead to a “decoupling” of the two economies if Donald Trump wins. But the situation will be vastly different if his Democratic opponent Joe Biden is victorious, they added. Export-reliant Korea, long sandwiched between the two, will need to diversify trading partners as part of a long-term drive to reduce its dependence on the two trade powerhouses.Yet strengthening domestic manufacturing capacity remains elusive in a country long bogged down by militant unions compounded by what businesses deem “motivation-sapping” regulations.Lingering issuesThe feud showed signs of a rapid escalatio

May 31, 2020By Lee Kyung-min
US-China tension to continue through Nov.
Economy

Gov't seeks to turn pandemic crisis into opportunity

Second Vice Minister of Economy and Finance An Il-whan delivers a speech on behalf of Deputy Prime Minister and Finance Minster Hong Nam-ki at The Korea Times Forum in The Plaza Seoul hotel, Thursday. Hong was unable to attend the forum due to an emergency economic ministerial meeting dealing with the COVID-19 pandemic. / Korea Times photo by Shim Hyun-chulDPM vows to strengthen 'crisis governance, pandemic resilience' By Lee Kyung-min The government will spearhead a comprehensive plan to turn the COVID-19 pandemic into an opportunity, amid what it calls a “critical milestone” to help the country emerge from the crisis and move toward becoming a more advanced economy, the country's top policy maker said Thursday.The competitive edge of a country in the post-corona virus world will hinge on its ability to maximize pandemic resilience, a reason why the government will mobilize its utmost efforts to strengthen its crisis management structure for public health and safety. “The future of the Korean economy will be determined by a series of measures undertaken following

May 28, 2020By Lee Kyung-min
Gov't seeks to turn pandemic crisis into opportunity
  • 'Greater gov't role needed to tackle corona divide'
Economy

'Greater gov't role needed to tackle corona divide'

―DPM says social safety net vital amid widening income disparity― By Lee Kyung-min The government is required to play a more significant role to prevent the COVID-19 pandemic from widening the growing income disparity, Deputy Prime Minister and Finance Minister Hong Nam-ki said Wednesday.Post-pandemic crisis management should prioritize strengthening the social safety net, thereby protecting the most vulnerable in society. Otherwise, the “corona divide” will end up undermining the sense of unity, a key to maintaining sustainable, long-term growth, according to the top policymaker.“Korea needs to make revisions to the state-run unemployment insurance system to help vulnerable people maintain a living despite suddenly losing their job. The measure is necessary to limit widening social inequality exacerbated by the virus,” Hong said in a speech at the Korea Times Forum held in The Plaza Seoul hotel, Thursday. Second Vice Minister of Economy and Finance An Il-whan read the speech on Hong's behalf.The Korean economy has been experiencing an unprecedented shock illu

May 28, 2020By Lee Kyung-min
'Greater gov't role needed to tackle corona divide'
  • Gov't seeks to turn pandemic crisis into opportunity
  • Korea, China set example for global cooperation on COVID-19
Economy

Financial risk assessment

Financial Services Commission Vice Chairman Sohn Byung-doo, second from right, speaks during a meeting at the Korea Federation of Banks headquarters in Seoul, Tuesday. / Courtesy of the Financial Services Commission

May 26, 2020By Lee Kyung-min
Financial risk assessment
Economy

3rd extra budget raises fiscal soundness concerns

High-level government officials attend a meeting to discuss long-term fiscal management plan at Cheong Wa Dae, Monday. / YonhapBy Lee Kyung-min The government plan to ask for at least 30 trillion won ($24 billion) in a third extra budget is adding to concerns about the country's fiscal soundness, as there will be few options but to issue debt to finance a slew of emergency relief measures to prevent the virus-hit economy here from crashing further. The administration maintains that Korea's fiscal soundness measured by debt-to-GDP ratio is much healthier than most OECD member states, stressing that the only way to help the flagging economy amid the COVID-19 pandemic is via prompt stimuli.The virus-triggered economic emergency notwithstanding, however, economists say policy makers should beware of climbing yields on government bonds, an indication that investors could ditch won-dominated debt for that issued in one among a number of major currencies at any sign of possible deterioration in debt management. The passage of the third extra budget is expected to pick up speed at the Nation

May 26, 2020By Lee Kyung-min
3rd extra budget raises fiscal soundness concerns
Economy

'Unemployment insurance for all' takes shape

Union representatives of delivery service workers listen to a government plan to expand unemployment insurance at the National Assembly in Yeouido, Seoul, May 21. YonhapBy Lee Kyung-min The government initiative to broaden the social safety net for low-income, irregular workers is picking up speed, Friday, after the National Assembly passed a related bill to make it mandatory for artists, entertainers and writers to subscribe to the state-run unemployment insurance.Yet criticism continues due mostly to lack of a concrete financing plan over who would pay monthly premiums and whether the government is ready to shoulder the burden amid a rapid deterioration of related funds. The Employment Insurance fund saw a 2.8 trillion won ($2.2 billion) deficit in 2019, a steeper fall from its 808.2 billion won deficit in 2018.The Ministry of Employment and Labor said, Thursday, the scope and extent of the insurance coverage and subscription eligibility are expected be expanded within 2020 to include those referred to as “special contract workers.” The 770,000 such workers eligible to

May 22, 2020By Lee Kyung-min
'Unemployment insurance for all' takes shape
Economy

Gold price to continue on upward spiral

gettyimagesbankBy Lee Kyung-min Gold prices are likely to continue to climb for the time being driven by elevated risk-averse sentiment due primarily to a longer-than-feared continuation of the COVID-19 pandemic, market watchers said Tuesday.The demand for “safe-haven” assets will continue an uptrend given the elusive global economic recovery, compounded by recent signs of the drawn-out U.S.-China feud escalating, they said.Also advancing the optimism is continued expansionary monetary policies put in place as part of emergency relief packages, pumping more money into the financial investment market already experiencing a liquidity overflow amid low interest rates.According to the Korea Exchange (KRX), one gram of a 1-kilogram gold bar closed at 68,086 won ($55.56), Tuesday, down 1,814.74 won or 2.7 percent from the previous session during which the figure peaked at 70,000 won.The Monday figure, first touching the 70,000 won mark, was over a 23.5 percent increase year-to-date from 56,540 won, and the highest since March 2014 when the domestic gold market first opened.The

May 20, 2020By Lee Kyung-min
Gold price to continue on upward spiral
Economy

Gov't to ease rules for local breweries

A customer picks up a bottle of soju at a shop in Seoul, April 28. / Korea Times fileBy Lee Kyung-min The government said Tuesday that it will make significant revisions to the law governing the manufacturing, sales and distribution of alcoholic beverages, in a move to help level the playing field for domestic businesses that are increasingly dwarfed by the rapid growth of the imported alcoholic beverage market over the past few years.The Ministry of Economy and Finance said local breweries will be able to save time and money via simplified regulations, eased rules on licensing and streamlined tax filing. “We believe the revisions will help remove overall inefficiencies, thereby helping local breweries gain a competitive edge against imported ones. Related industries are also expected to benefit,” a ministry official said. The measure came amid steady decline in sales by domestic breweries over the past few years, an inevitable result of what they consider a “loophole” long exploited by their foreign counterparts that are not subject to the same heavy tax and

May 19, 2020By Lee Kyung-min
Gov't to ease rules for local breweries
Economy

Gov't reshoring initiative draws little enthusiasm

President Moon Jae-in delivers a speech during the third-year anniversary of his inauguration at Cheong Wa Dae, May 10. Moon said the government will bolster the reshoring of Korean firms overseas. / Korea Times file 'Risk diversification' plan needed to reduce value chain disruptionBy Lee Kyung-min The government's initiative to bring the country's manufacturing back home, known as its “reshoring initiative,” has gained a lukewarm response from local businesses which claim that there is no reason to return home unless the government overhauls “outdated and growth-stunting” regulations. The Moon Jae-in administration's move to speed up reshoring came amid elevated concerns of global value chain disruption brought on by the COVID-19 pandemic.An official from the Federation of Korean Industries said businesses will have no reason to return without a measure to reduce labor costs. “Many firms have come under increasing pressure over the past few years due to a rapid hike of minimum wage. Without assurances involving substantial reduction in the fixed labor

May 19, 2020By Lee Kyung-min
Gov't reshoring initiative draws little enthusiasm
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