Economy - The Korea Times

BOK governor nominee signals prolonged rate pause as policy seen near neutral level

Bank of Korea (BOK) Gov. nominee Shin Hyun-song suggested that Korea’s benchmark interest rate is currently around the midpoint of the neutral range, according to an opposition lawmaker on Sunday. The remarks imply that, under his leadership, the central bank is likely to maintain its pause in rate adjustments for the time being, adopting a measured approach that considers both inflation and growth rather than pursuing abrupt policy shifts. In a written response to an inquiry from Rep. Chun Ha-ram of the minor Reform Party, Shin said the current policy rate of 2.5 percent “lies near the middle of the neutral rate range estimated by the BOK using a range of models.” The neutral rate is generally understood as the theoretical level of interest that neither fuels inflation nor constrains economic growth, and is typically derived through model-based analysis. Shin, who served as the head of the monetary and economic department at the Bank for International Settlements, had been widely viewed as leaning hawkish, largely due to his prior emphasis on financial stability and proactive infl

Apr 12, 2026By Jun Ji-hye

BOK governor nominee signals prolonged rate pause as policy seen near neutral level

Rival parties agree on $17.7 bil. extra budget bill to mitigate fallout from Mideast war

Rival parties agreed to pass an extra budget bill aimed at coping with the economic fallout from the ongoing war in the Middle East at a parliamentary plenary session later Friday. The ruling Democratic Party of Korea(DPK) and the main opposition People Power Party (PPP) reached the agreement to keep the size of the supplementary budget at 26.2 trillion won ($17.7 billion), unchanged from the government's initial proposal. The parties agreed to include in the budget the government's plan to distribute cash assistance to the bottom 70 percent of income earners designed to help ease the burden from rising oil prices. If the bill is passed, about 35.8 million people will receive between 100,000 won and 600,000 won per person, with payments differentiated by income level and region. The DPK and the PPP also agreed to allocate an additional 200 billion won to ensure the stable supply of naphtha, a key feedstock widely used in the petrochemical and other industries. The extra budget aims to ease the burden of rising oil prices and protect small businesses and vulnerable households from the econ

Apr 10, 2026By Yonhap

Rival parties agree on $17.7 bil. extra budget bill to mitigate fallout from Mideast war

Korean won will gain against dollar when Iran conflict eases: BOK chief

If tensions in the Middle East stabilize, the won-dollar exchange rate will likely “fall back just as quickly as it surged,” Bank of Korea (BOK) Gov. Rhee Chang-yong said Friday. The central bank also held its benchmark interest rate steady at 2.5 percent, marking the seventh consecutive freeze since July 2025 as mounting inflationary pressure and foreign exchange volatility left little room for a policy shift. Following the outbreak of the U.S.-Israel war against Iran in late February, the won weakened past the 1,500-per-dollar level, even breaching 1,530 for its worst point since 2009 during the global financial crisis. “Foreign investors sold about $7 billion in Korean equities over the entire last year. But this year, from January to April alone, net selling jumped nearly sevenfold to reach $47.8 billion,” Rhee said during a press conference at BOK headquarters in Seoul. It was Rhee’s last Monetary Policy Board meeting at the central bank before his term ends on April 20. He will likely be succeeded by nominee Shin Hyun-song, a former economic adviser and head of the Moneta

Apr 10, 2026By Park Han-sol

Korean won will gain against dollar when Iran conflict eases: BOK chief

Gov't prioritizes supply of health care products, raw materials amid shortage concerns

The government is prioritizing the stable supply of health care products, daily necessities and key raw materials, such as naphtha, amid shortage concerns stemming from the Middle East crisis, Finance Minister Koo Yun-cheol said Friday. The supply of major raw materials related directly to everyday life has been facing disruptions since U.S. and Israeli strikes on Iran in late February as the Strait of Hormuz, a major Middle Eastern shipping route, has been effectively shut down. "While closely monitoring supply and demand of key items, price trends and industry impacts, the government will swiftly address corporate difficulties arising from supply chain instability," Koo said in an economy ministers' meeting on supply chain disruptions. He stressed the government will prioritize supplying raw materials, such as naphtha, a key feedstock widely used in petrochemical and other industries, as well as health care products and daily necessities. To prevent supply instability and hoarding of essential goods, the government on Wednesday designated seven basic petrochemical products as crisis it

Apr 10, 2026By Yonhap

Gov't prioritizes supply of health care products, raw materials amid shortage concerns

Fiscal strain builds as expansionary policy continues

Concerns are growing over the country’s fiscal soundness as government debt topped 1,300 trillion won ($877 billion) in 2025, rising by about 130 trillion won in a single year to a record high, experts said Thursday. Further adding to the concerns, the government is maintaining an expansionary fiscal stance, with additional supplementary budgets expected to put further pressure on public finances amid the prolonged Middle East conflict. The government projects the debt could climb to nearly 1,800 trillion won by 2029. Experts warned that the most pressing concern is the pace of increase, underscoring the need for a balanced approach that maintains fiscal discipline while directing spending to priority areas. According to the government’s 2025 fiscal year settlement report, which was approved Monday, government debt stood at 1,304.5 trillion won, up 129.4 trillion won from a year earlier. The figure exceeded the original budget estimate of 1,301.9 trillion won by 2.6 trillion won, marking an all-time high. The debt-to-GDP ratio rose to 49 percent from 46 percent a year earlier and is

Apr 10, 2026By Jun Ji-hye

Fiscal strain builds as expansionary policy continues

Gov't to exempt owners of multiple homes from heavier tax if they sell by May 9

The government will exempt owners of multiple homes from higher capital gains taxes should they file for sales permits by May 9, the finance ministry said Thursday. The move follows President Lee Jae Myung's directive earlier this week to introduce supplementary measures giving people owning multiple homes extra time to sell properties before the exemption ends, with the law imposing higher taxes set to take effect May 9. The ministry said the grace period for owners of multiple homes in designated speculative areas will end as scheduled May 9, but those who apply for land transaction permits by the same day will be excluded from the heavier tax. Accordingly, sales transactions of properties in Seoul's long-designated speculative zones — Gangnam, Seocho, Songpa and Yongsan districts — need to be completed by Sept. 9, the ministry added. For those in the remaining 21 other districts of Seoul that were newly designated as speculative zones in October, owners have up to six months, or until Nov. 9, to complete transactions. The maximum tax rate will reach 75 percent for capital gains on

Apr 9, 2026By Yonhap

Gov't to exempt owners of multiple homes from heavier tax if they sell by May 9

Regulators tighten crypto exchanges' withdrawal rules to curb scams

Financial regulators said Wednesday they will close loopholes in how cryptocurrency exchanges handle withdrawal delays by introducing a unified set of exemption rules across the industry. The measure is aimed at preventing criminals, such as voice phishing and scammers, from quickly cashing out stolen funds. In many cases, illicit money is first deposited into an account, converted into cryptocurrency and then withdrawn before it can be traced or frozen. Since May 2025, authorities have required exchanges to delay crypto withdrawals for 24 to 72 hours after a deposit. The idea is to create a buffer period that gives financial institutions time to detect and block suspicious transactions. There are exemptions to the rule, based on factors such as how long an account has been active, its transaction history, trading volume and any record of financial misconduct. However, until now, each exchange applied its own criteria. That inconsistency created loopholes. In some cases, accounts could qualify for exemptions relatively easily, allowing scammers to bypass the delay and withdraw funds almo

Apr 8, 2026By Park Han-sol

Regulators tighten crypto exchanges' withdrawal rules to curb scams

Gov't to regularly check prices of automotive lubricant, marine fuel to stabilize supplies

The government will conduct weekly checkups on automotive lubricant and marine fuel markets to rein in rising prices and stabilize supplies of such products, the industry ministry said Wednesday. The Ministry of Trade, Industry and Resources unveiled the plan at a meeting with officials from related ministries and the fuel industry, held to discuss a response to increasing prices of automotive lubricant, such as engine oil, and marine fuel products and their supply disruptions. The ministry said it has been leading an intergovernmental inspection team to look into why the country is facing shortages in automotive lubricant supplies despite stable production of the product. Korea's lubricant production stood at 760,000 barrels last month, marking a slight increase from the corresponding figure of 710,000 barrels in March last year, according to data compiled by the Korea Petroleum Association. The government will work to boost the transparency of domestic petroleum product supply chains and respond to any act disrupting market order, such as artificial supply control and excessive price h

Apr 8, 2026By Yonhap

Gov't to regularly check prices of automotive lubricant, marine fuel to stabilize supplies

7th consecutive rate hold looms as Middle East risks weigh on economy

The Bank of Korea (BOK) is widely expected to keep its interest rate unchanged at 2.5 percent at Friday's monetary policy board meeting, market watchers said Tuesday, as rising Middle East tensions add to inflation and foreign exchange risks. The central bank has held the benchmark interest rate steady for six consecutive meetings, and analysts view the current economic backdrop as leaving little room for a policy shift. With inflation and foreign exchange volatility rising amid increasingly prolonged conflict in Iran, the BOK faces a policy dilemma. A rate cut could fuel inflationary pressures, while a hike risks deepening the economic slowdown and clashing with the government’s expansionary fiscal policy, including a planned 26.2 trillion won ($17.3 billion) supplementary budget. Joo Won, a senior researcher at the Hyundai Research Institute, said the six members of the monetary policy board are likely to unanimously hold rates at Friday's meeting. "With liquidity expected to be injected through the supplementary budget, a rate cut could further fuel inflationary pressures," Joo said

Apr 7, 2026By Lee Hyo-jin

7th consecutive rate hold looms as Middle East risks weigh on economy

Gov't to provide additional liquidity, ease refinancing burden for crisis-hit firms

Finance authorities will expand policy financing programs and ease bond refinancing burdens for companies affected by the prolonged crisis in the Middle East, the financial regulator said Tuesday. Financial Services Commission (FSC) Chairman Lee Eog-weon made the remarks during a meeting with officials from the petrochemical and refining industries, which are particularly vulnerable to global supply disruptions and rising costs stemming from the conflict involving Iran. The government expanded the size of emergency funding programs from 20.3 trillion won ($13.47 billion) to 24.3 trillion won late last month and plans to increase it further to 26.8 trillion won through a supplementary budget, according to the FSC. Private financial institutions, including five major financial holding groups, are also expected to supply more than 53 trillion won in new financing programs. Starting Tuesday, small and midsized firms affected by the Middle East crisis will be allowed to lower repayment ratios and reduce interest premiums when refinancing primary collateralized bond obligations (P-CBOs) within

Apr 7, 2026By Yonhap

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