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  • Economy

    Expected BOK rate hike prompts concern over rising interest burdens on households, firms

    Expectations of imminent interest rate hikes by the Bank of Korea (BOK) are adding to pressure on households and businesses already struggling with rising borrowing costs, analysts said Sunday. Lending rates at major banks have continued to climb as BOK Gov. Shin Hyun-song struck a hawkish tone following a Monetary Policy Board meeting on May 28, reinforcing market expectations that the central bank could begin raising rates as early as July. According to banking industry data, fixed-rate mortgage loans offered by the country's five major lenders — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — carried interest rates ranging from 4.39 percent to 7.33 percent as of Friday. The upper end of the range was up 0.33 percentage point from a month earlier, when rates stood between 4.4 percent and 7 percent. It marked the first time since October 2022 that the highest fixed mortgage rate among the five major lenders exceeded 7.3 percent. Personal credit loan rates have also moved higher. As of Friday, interest rates on personal credit loans for top-tier borrowers with one-year maturities ra

    2 MIN READBy Lee Hyo-jin
    Expected BOK rate hike prompts concern over rising interest burdens on households, firms
  • Others

    AI-fueled Samsung affiliates reshape KOSPI market cap rankings

    2 MIN READBy Jun Ji-hye
    AI-fueled Samsung affiliates reshape KOSPI market cap rankings
  • Policy

    Top policymakers vow stern action against speculative FX market activities as won weakens

    2 MIN READBy Yonhap
    Top policymakers vow stern action against speculative FX market activities as won weakens
  • Cryptocurrency

    Bithumb's bitcoin payout blunder results in $1.6 mil. compensation

    2 MIN READBy Lee Hyo-jin
    Bithumb's bitcoin payout blunder results in $1.6 mil. compensation
  • Economy

    S. Korean retail investors sell over $641 bil. in overseas stocks in 1st week of June

    1 MIN READBy Yonhap
    S. Korean retail investors sell over $641 bil. in overseas stocks in 1st week of June
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CEO & Publisher: Oh Young-jinDigital News Email: webmaster@koreatimes.co.krTel: 02-724-2114Online newspaper registration No: 서울,아52844Date of registration: 2020.02.05Masthead: The Korea TimesCopyright © koreatimes.co.kr. All rights reserved.

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Economy

INTERVIEW South Korean economy won't enter recession: Moody's

S. Korea has enough FX holdings to prevent further slide of wonBy Kim Yoo-chulWhile fears of a global economic recession are directly hitting South Korean equity and currency markets prompting investors to flee the export-driven country, the likelihood of recession here, Asia's fourth-largest economy, is low, according to Moody's Analytics.All negative investor sentiment has been factored in. The won, South Korea's currency, has been by far one of the worst performers among major currencies. The won has fallen about 17 percent against the dollar since the beginning of this year and it is feared to reach the 1,500 won level against the greenback this year because the country is not in a strong position to defend against the U.S. Federal Reserve (Fed)'s moves to hike interest rates. Dave Chia, associate economist, Moody's Analytics, left, and Anushka Shah, vice president, Moody's Investors Service / Korea Times fileGovernment bond yields rose quite rapidly across the board. Rising benchmark rates, deepening geopolitical risks, a stronger greenback, increasing inventories and tepid end-

Oct 13, 2022By Kim Yoo-chul
[INTERVIEW] South Korean economy won't enter recession: Moody's
Economy

BOK delivers 2nd 'big step' rate hike to curb inflation, capital flight

Bank of Korea (BOK) Governor Rhee Chang-yong bangs a gavel during a rate-setting meeting at the central bank in downtown Seoul, Wednesday. YonhapGovernor hints at another outsized rate increase in NovemberBy Yi Whan-wooThe Bank of Korea (BOK) took another “big step” rate hike of half a percentage point Wednesday in a bid to fight inflation and prevent a possible capital flight amid the sharp depreciation of the Korean currency against the U.S. dollar.It was the second outsized rate increase following one in July, and the fifth consecutive monetary tightening since April. Wednesday's decision sent the nation's benchmark rate back to 3 percent for the first time since October 2012.The 3 percent rate is believed to be a level that can influence an economic slowdown, since it is higher than a 2.75 percent neutral rate, at which monetary policy is neither stimulating nor restricting economic growth.Nevertheless, the BOK's monetary policy board still hinted at additional rate hikes, addressing that it sees “continuous rate hikes as warranted.”“The board will c

Oct 12, 2022By Yi Whan-woo
BOK delivers 2nd 'big step' rate hike to curb inflation, capital flight
Economy

BOK delivers another big-step rate hike to rein in inflation

Bank of Korea Gov. Rhee Chang-yong chair a monetary policy board meeting at the central bank in Seoul, Oct. 12. Courtesy of Bank of KoreaKorea's central bank delivered another big-step rate hike Wednesday as it is striving to bring inflation under control despite worries that it could excessively slow down economic growth.The monetary policy board of the Bank of Korea (BOK) voted to raise the benchmark seven-day repo rate from 2.5 percent to 3 percent at a rate-setting meeting earlier in the day, according to the central bank. It is the first time in about 10 years that the rate has risen to the 3 percent range. Wednesday's rate increase marked the eighth rate hike ― by a combined 2.5 percentage points ― since August last year when the BOK begun raising the borrowing cost that had stayed at a record low to shore up the pandemic-hit economy.It also represented the fifth straight increase and marked the second big-step rise since the first-ever 50 basis-point hike in July. A basis point is one hundredth of a percentage point.The BOK had been widely expected to increase the benchmark ra

Oct 12, 2022
BOK delivers another big-step rate hike to rein in inflation
Economy

IMF raises Korea's 2022 inflation outlook to 5.5%

Government advised to continue monetary tighteningBy Yi Whan-wooThe International Monetary Fund (IMF) raised its 2022 inflation outlook for Korea to 5.5 percent, Tuesday, up from 4 percent in its previous forecast made in April, citing growing downside risks for the global economy.In its updated world economic outlook for this year, the IMF said downside risks are deepened by soaring prices, higher exchange rates per dollar and other negative factors that are being witnessed throughout the world.The IMF accordingly elevated next year's inflation forecast for Korea to 3.8 percent, up from 2.5 percent projected in April.The U.S.-headquartered institution said Korea's economy is expected to grow 2.6 percent in 2022 ― a turnaround after the forecast was lowered from 3 percent in January to 2.5 percent in April and down further to 2.3 percent in July.But for 2023, the growth outlook for Asia's fourth-largest economy was lowered slightly to 2 percent from 2.1 percent in July, reflecting the increasing downside risks.The IMF referred to a strong dollar against other currencies and rising in

Oct 11, 2022By Yi Whan-woo
IMF raises Korea's 2022 inflation outlook to 5.5%
Economy

FSS vows stern action against suspicious overseas remittance cases

Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during an audit session held at the National Assembly in Seoul, Tuesday. YonhapBy Anna J. ParkThe Financial Supervisory Service (FSS) plans to wrap up its months-long investigations over local banks and securities firms' abnormal overseas remittance transactions that amounted to nearly 10 trillion won ($7 billion) in 2021.According to an FSS briefing at an annual audit session held at the National Assembly on Tuesday, a total of 82 local business entities were investigated for involvement in suspicious overseas remittance transactions at dozens of local banks totaling $7.22 billion over the past 12 to 18 months. As the transactions seemed suspicious in terms of both remittance size and local entities' business activities, the FSS has been looking into the cases with the cooperation of the banks since June this year. As the total amount of suspicious transfers snowballed during the course of the financial watchdog's investigation over the past months, the investigation has far exceeded its originally planned duration. If

Oct 11, 2022By Anna J. Park
FSS vows stern action against suspicious overseas remittance cases
Economy

Korean large-cap stocks plunge on fears of recession

An electronic board set up in a dealing room at Hana Bank's headquarters in Seoul shows a drop of the benchmark KOPSI and a rise of the won-dollar exchange rate, Tuesday. YonhapBy Lee Min-hyungKorea's large-cap stocks plunged Tuesday on deepening fears of recession and growing burden over possible additional rate hikes by the U.S. Fed.The benchmark KOSPI closed with a loss of 1.83 percent at 2,192.07 from the previous trading day, falling below the 2,200-point mark again on institutional investors' mass selling spree. The secondary Kosdaq also fell sharply, closing at 669.5, down 4.15 percent during the same period.The Korean won also weakened further against the dollar. The won-dollar exchange rate closed at 1,435.2 won per dollar, up 22.8 won from the previous session.The poor performance of leading stocks pulled down the main bourse. Shares of Samsung Electronics, the nation's most valuable firm by market capitalization, extended their losses with a drop of 1.42 percent. Samsung's shares soared to a new high of 90,000 won early last year, but have since lost the momentum for a reb

Oct 11, 2022By Lee Min-hyung
Korean large-cap stocks plunge on fears of recession
Cryptocurrency

Do Kwon's passport to be invalidated

Terraform Labs co-founder Do Kwon / Courtesy of Kwon's LinkedIn pageBy Lee Min-hyungThe passport of Do Kwon, co-founder of scandal-tainted stablecoin developer Terraform Labs, will be invalidated as of Oct. 19, which Korean prosecutors believe will help uncover his whereabouts. Under the order, he will be forced to be deported to his home country as an unauthorized immigrant. Even if Kwon argued that he is not “on the run,” the founder of the Terra stablecoin and its sister token, Luna, has not disclosed where he is staying, leaving only some sarcastic comments about the ongoing investigation targeting him.Earlier, Interpol issued a Red Notice for Kwon's arrest upon the request of Korea's investigative authorities. Kwon faces fraud charges related to the abrupt meltdown of two once-promising cryptocurrencies, which he has denied since the incident took place in May this year.Investors' fury has escalated over the past few months, as Kwon has rarely made public appearances, nor did he take any sincere actions to make public any facts over the charges he faces by responding

Oct 11, 2022By Lee Min-hyung
Do Kwon's passport to be invalidated
Economy

International financial institutions to recruit in Korea next month

A promotional image for the 14th International Financial Institutions Career Fair / Screenshot from the career fair's websiteBy Yi Whan-wooA total of 11 international financial institutions, including the International Monetary Fund (IMF), the World Bank, the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB), will participate in a career fair in Korea next month. Hosted by the Ministry of Economy and Finance, the program will take place at ChungAng University in Dongjak District, Seoul, from Nov. 17 to 18. The ministry has hosted the program 13 times so far.The recruiters from each of the 11 entities will come to Korea ― for the first time in three years ― and explain their hiring processes.The two-day fair will also include Q&A sessions for Korean employees at 11 institutions. Applicants are required to register online by Nov. 11.There will be on-site interviews for those who are considered suitable for the jobs offered.“We expect the program will offer a chance for the participating entities to hire talented jobseekers for

Oct 11, 2022By Yi Whan-woo
International financial institutions to recruit in Korea next month
Economy

FSS chief voices regret over failure in timely responding to global tightening

Lee Bok-hyun, head of the Financial Supervisory Service / YonhapKorea's financial regulator on Tuesday expressed regret over failure in taking timely action against rising household debt amid global monetary tightening that has led to a sharp rise in borrowing costs. "I share the disappointment that we had to make preparations for the possibility of quantitative tightening or interest rate trends in advance," Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), told lawmakers during a parliamentary audit session. He added that financial authorities had failed to recognize the urgent need to curtail household debt or change its composition for which he apologized. Household debt has been emerging as a major risk factor for the local economy as borrowers are under a rising debt-servicing burden from fast-increasing interest rates amid global monetary tightening.The Bank of Korea has hiked its policy rate seven times by a combined 2 percentage points since August last year to rein in inflation. The central bank is widely expected to deliver another rate hike at a meeting Wedn

Oct 11, 2022
FSS chief voices regret over failure in timely responding to global tightening
Economy

Sales of short-term bonds fall 22% in Q3: KSD

Korea Securities Depository (KSD) / Korea Times fileSales of short-term corporate bonds in Korea declined 22.2 percent in the third quarter of 2022 from a year earlier mainly due to a sharp fall in the general short-term bond issuance, data showed Tuesday.Local firms floated 250.9 trillion won ($175 billion) worth of short-term bonds in the July-September period, compared with 322.6 trillion won from a year earlier, according to the data from the Korea Securities Depository (KSD). Compared with the previous quarter, the amount was down 20.7 percent.Short-term bonds refer to those that come due within one year, with the minimum amount of 100 million won or more per issue.The KSD said 99.9 percent of the short-term bonds issued in the third quarter mature within three months. The issuance of general short-term bonds nose-dived 38.6 percent on-year to 165.2 trillion won, while sales of securitized bonds floated by special purpose companies (SPCs) and other firms, such as asset backed and project financing backed short-term bonds, jumped 59.6 percent to 85.7 trillion won. (Yonhap)

Oct 11, 2022
Sales of short-term bonds fall 22% in Q3: KSD
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