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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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Economy

Exports down 20.2% during first 10 days of October

Containers of exports and imports are stacked at a pier in Korea's largest port city of Busan, Oct. 7. YonhapKorea's exports slipped 20.2 percent on-year in the first 10 days of October due mainly to sluggish overseas sales of chips, data showed Tuesday.The country's outbound shipments stood at $11.8 billion in the Oct. 1-10 period, compared with $14.8 billion a year earlier, according to the data from the Korea Customs Service.Imports also went down 11.3 percent on-year to $15.6 billion during the cited period, resulting in a trade deficit of $3.8 billion.The decline also came as the number of working days during the period came to five days, with the comparable figure for last year coming to 5.5 days.By sector, outbound shipments of chips, the mainstay export product for Asia's No. 4 economy, fell 20.6 percent on-year in the first 10 days of the month to reach $2.2 billion. Exports of petroleum products also lost 21.3 percent to $1 billion.In contrast, Korea's exports of automobiles and ships gained 5.4 percent and 76.4 percent over the cited period to reach $945 million and $508 m

Oct 11, 2022
Exports down 20.2% during first 10 days of October
Economy

Nearly 15% of Korea's foreign direct investment ended up in tax havens

gettyimagesbankBy Lee Kyung-minOver $11.2 billion (1.59 trillion won) in foreign direct investments (FDI) made by Korean firms and individuals found its way to tax havens including the Cayman Islands and Panama last year, a main opposition party lawmaker said Monday. This amount accounted for 14.6 percent of the country's total FDI totaling $76.4 billion in the same period.Investment funds funneled to tax havens are used mostly for corporate mergers and acquisitions. However, concerns remain about illicit activities from links between the funds and tax evasion attempts through shell corporations set up and operated by Korean nationals. According to data submitted to Rep. Kang Jun-hyeon of the main opposition Democratic Party of Korea by the state-run Export-Import Bank of Korea, Korea's FDI in tax havens came to $8.6 billion in 2019, up from $1.81 billion in 2012. The figure has been on the rise over the past decade.The FDI in tax havens accounted for 13.3 percent of the total FDI made by Korean firms and individuals in 2019, up from 6.1 percent in 2012.Investments worth over $5.8 bi

Oct 11, 2022By Lee Kyung-min
Nearly 15% of Korea's foreign direct investment ended up in tax havens
Economy

Finance minister to promote Korea's potential as investment destination in US trip

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho speaks about economic issues during a meeting with reporters at the Government Complex Sejong, Thursday. YonhapBy Yi Whan-wooDeputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is anticipated to promote Korea's potential as a lucrative destination for overseas investors in his visit to the United States this week, according to financial sources, Monday. Choo left for the U.S., Monday, to attend gatherings involving finance ministers from G20 countries, as well as chiefs of the World Bank, the International Monetary Fund (IMF) and the world's three major rating agencies, S&P, Moody's and Fitch.The meetings, either bilateral or multilateral, will be held between Wednesday and Friday in Washington, D.C., as growing volatility in Korea's financial market and the outflow of foreign capital are adding to concerns over a possible economic crisis here.“Under the circumstances, the finance minister plans to explain that Korea's fiscal health remains steady despite growing economic risks withi

Oct 10, 2022By Yi Whan-woo
Finance minister to promote Korea's potential as investment destination in US trip
Economy

Some 380,000 households at high risk of default due to excessive debt burden: BOK

This undated file photo shows the Bank of Korea office building in central Seoul. YonhapSome 380,000 households in Korea were found to be at high risk of financial default due to excessive debt burdens, a central bank report showed Monday.According to the Bank of Korea (BOK) report submitted to Rep. Kang Joon-hyun of the main opposition Democratic Party of Korea, the number of households at high risk in terms of financial liabilities reached 381,000 as of the end of last year.The BOK defines such high-risk households as those that are unable to pay back their loans even through disposal of their entire assets. The tally represents 3.2 percent of all households with debts. It is lower than the 403,000 count from a year earlier but up from 376,000 in 2019 before the COVID-19 pandemic.The combined debt volume of high-risk households as of last year amounted to 69.4 trillion won ($48.7 billion), or 6.2 percent of the country's entire debt liabilities. (Yonhap)

Oct 10, 2022
Some 380,000 households at high risk of default due to excessive debt burden: BOK
Economy

BOK expected to deliver second 'big step' rate hike this week

Bank of Korea (BOK) Governor Rhee Chang-yong speaks during a parliamentary audit of the BOK at the National Assembly in Yeoudio, Seoul, Friday. The BOK is scheduled to hold a rate-setting meeting, Wednesday. YonhapBy Yi Whan-wooThe Bank of Korea (BOK) is expected to conduct another “big step” hike of half a percentage point in its rate-setting meeting scheduled on Wednesday, in a bid to fight inflation and prevent a possible capital flight, according to analysts, Sunday. The Korean won's sharp depreciation against the U.S. dollar as well as widening trade deficit are also pressuring the BOK to consider delivering its second 50-basis-point hike following the first one in July, rather than a quarter percentage point increase it has favored. Currently, the BOK's key rate is set at 2.5 percent.“Consumer prices are still high, and the BOK is believed to be betting on the possibility of inflation not cooling off in the coming months,” said Cho Young-moo, a researcher at LG Economic Research Institute.Consumer prices, after hitting a near 24-year-high of 6.3 percent

Oct 9, 2022By Yi Whan-woo
BOK expected to deliver second 'big step' rate hike this week
Economy

Startups see corporate values dive due to tightened liquidity

gettyimagesbankBy Anna J. Park A rapid tightening of global liquidity is dealing hefty blows to local startup companies, as many of them are forced to accept much-lowered corporate valuations to attract new investments. An overall drop in new investments made by venture capital companies has forced startups to sell their stakes at much lower prices.For instance, Balaan, a high-end fashion shopping commerce platform, recently received 10 billion won ($7 million) from Shinhan Capital at a corporate value of 300 billion won. That is less than the half of what that the fashion platform company originally aimed to attract in investments at the start of this year. The company hoped to be appraised at 800 billion, yet it had to cut its valuation down to 500 billion won a few months later. Finally, it was able to attract Shinhan Capital's money at a value of 300 billion won in late September.Balaan's competitor Trenbe also lowered its corporate valuation to 280 billion won in its latest investment round, down 30 percent from its target of 400 billion won. Many startups' corporate valuations

Oct 9, 2022By Anna J. Park
Startups see corporate values dive due to tightened liquidity
Economy

Currency swap deal is not cure-all to stabilize exchange rate: BOK chief

Bank of Korea Governor Rhee Chang-yong answers questions from lawmakers during the National Assembly's annual audit in Seoul, Friday. Joint Press Corps-YonhapBy Lee Min-hyungClinching the Korea-U.S. currency swap deal is not a cure-all to stabilize the sharp depreciation of the Korean won against the dollar from a long-term perspective, Bank of Korea (BOK) Governor Rhee Chang-yong said Friday.“It is hard to come to a conclusion that the currency swap agreement will stabilize the won-dollar exchange rate from a long-term viewpoint,” Rhee told lawmakers during a National Assembly's annual audit. “Shrinking global dollar liquidity is a precondition for the swap deal.”The remark came amid growing public unrest triggered by the soaring won-dollar exchange rate which topped 1,400 won per dollar. The won-dollar rate closed at 1,412.4 on Friday, up 10 won from the previous day. The figure hovered around 1,200 won in January this year, but starting last month, it has been on a rapid rise amid the Fed's reiterated hawkish rhetoric. This prompted a call for the Korean ce

Oct 7, 2022By Lee Min-hyung
Currency swap deal is not cure-all to stabilize exchange rate: BOK chief
Economy

Kakao shares nosedive on rate hikes, weak earnings outlook

Kakao's headquarters on Jeju Island / YonhapBy Lee Min-hyungKakao shares are showing little signs of a rebound, as persistent fears of additional rate hikes by the U.S. Federal Reserve weaken investor confidence particularly in major growth stocks, analysts said Friday.Kakao is the operator of Korea's dominant mobile messenger platform, KakaoTalk. The company was considered to be the biggest beneficiary of the pandemic-induced stock rally here last year. In June 2021, Kakao shares reached a historic high of more than 170,000 won per share amid near-zero interest rates at the time and booming market sentiment.But the company was hit hardest by an abrupt shift in global macroeconomic conditions this year. The stock price of Kakao closed down 7.12 percent at 50,900 won on Friday. Other major tech growth stocks here, such as Naver, also suffered major losses in their values during the same period.Market analysts also remained pessimistic on a potential near-term rebound of the nation's representative growth stocks due to the firm's lukewarm earnings performance and prolonged uncertainty

Oct 7, 2022By Lee Min-hyung
Kakao shares nosedive on rate hikes, weak earnings outlook
Economy

BOK to maintain monetary tightening stance amid high inflation

Bank of Korea Gov. Rhee Chang-yong, center, presides over a Monetary Policy Committee meeting at the central bank in Seoul, Aug. 25. YonhapKorea's central bank said Friday it will maintain its position to raise interest rates going forward to combat inflation that is expected to stay in the 5-6 percent range "for a considerable period of time."In a report submitted to lawmakers for a parliamentary audit, the Bank of Korea (BOK) voiced concerns a sharp slide of the local currency against the U.S. dollar will likely apply upward pressure on prices."It is of urgent need to keep a lid on inflation expectations and prevent high inflation from getting entrenched," the report said. "We will keep our stance to raise rates going forward."It is in line with the BOK's repeated position that it will keep raising the cost of borrowing to rein in inflation that has been driven up amid high energy and commodity prices.The country's consumer prices, a key gauge of inflation, grew 5.6 percent on-year in September, slowing from a 5.7 percent rise in August, thanks in part to eased price hikes of crude

Oct 7, 2022
BOK to maintain monetary tightening stance amid high inflation
Economy

Finance minister to leave for US to attend G-20, IMF meetings

Finance Minister Choo Kyung-ho speaks during a press conference in the central city of Sejong, Oct. 6. YonhapFinance Minister Choo Kyung-ho will leave for the United States next week to attend a Group of 20 (G-20) meeting of finance chiefs and central bankers, along with other events, his office said Friday.Choo plans to start his six-day trip by delivering a presentation on the Korean economy to foreign investors in New York on Tuesday (U.S. time) and briefing them on the government's new economic policies, according to the Ministry of Economy and Finance.He will then travel to Washington, D.C., to participate in the ministerial meeting of the Coalition of Finance Ministers for Climate Action on Wednesday, where Choo will discuss green economic policies with financial officials from 78 countries and global organizations.Choo also plans to attend a two-day G-20 meeting of finance chiefs that will kick off on Wednesday and discuss pending issues with major economies, including the disruptions in supply chains and concerns over an economic slump.On Friday, Choo will take part in the In

Oct 7, 2022
Finance minister to leave for US to attend G-20, IMF meetings
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