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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

Korea posts current account deficit in Aug. amid slowing exports, mounting import bills

This Sept. 1, file photo shows inbound containers stacked up at the Gamman Quay in the southeastern city of Busan. YonhapKorea posted a current account deficit for the first time in four months in August as exports grew at a slower pace and import bills continued to mount amid high crude oil and raw material prices, central bank data showed Friday.The country's current account shortfall came to $3.05 billion in August, a sharp turnaround from a surplus of a revised $790 million tallied a month earlier, according to the preliminary data from the Bank of Korea (BOK).This marked the first time in four months that the country has posted a current account deficit. The country last posted a shortfall of $79.3 million in April.During the January-August period, the country logged a cumulative surplus of $22.52 billion, which more than halved from a surplus of $56.90 billion a year earlier, the data showed.August's turnaround came as Korea's exports dwindled amid worries over a global recession and high import bills due to rising energy and commodity prices. On a customs-cleared basis, export

Oct 7, 2022
Korea posts current account deficit in Aug. amid slowing exports, mounting import bills
Economy

Korea's foreign exchange reserves suffer biggest drop since 2008 crisis

Sharp decline adds to concerns along with growing national debt, fiscal deficitBy Yi Whan-wooKorea's foreign exchange reserves fell at the fastest pace since the 2008-09 global financial crisis, adding to concerns of another possible economic emergency in the midst of other worsening economic indicators.According to the Bank of Korea (BOK), Thursday, the foreign exchange reserves shrank to $416.77 billion in September from $436.43 billion in August.The $21.8 billion decline marked the sharpest month-on-month fall in the foreign exchange reserves since October 2008, when they shrank by a record $27.42 billion in the midst of the global financial crisis.The BOK attributed the sharp fall to foreign exchange authorities unloading the government's U.S. currency holdings to stabilize a sharp depreciation of the Korean won against the dollar last month.The fall was also attributed to a decline in the converted value of non-dollar assets due to the continued strengthening of the greenback, the central bank explained.The Korean currency depreciated around 16 percent against the dollar so far

Oct 6, 2022By Yi Whan-woo
Korea's foreign exchange reserves suffer biggest drop since 2008 crisis
Economy

Financial regulator considers disclosing foreign firms in case of illegal short selling

Financial Services Commission Chairman Kim Joo-hyun answers questions from lawmakers during a National Assembly audit in Seoul, Thursday. Joint Press Corps-YonhapBy Lee Min-hyungThe Financial Services Commission (FSC) is considering disclosing a list of foreign companies caught engaging in illegal short-selling of local shares amid escalating public complaints on the trading practice here, FSC Chairman Kim Joo-hyun said Thursday.The remark came amid growing public distrust of short-selling here, as financial authorities have not made public the names of foreign investors or institutions even when they were caught doing so in the stock market here.According to data from Rep. Yoo Eui-dong from the ruling People Power Party, a total of 127 illegal short-selling cases have so far been found since the Capital Market Law took effect in 2009. But financial regulators have not been able to disclose their corporate names due to legal hurdles.Yoo pointed out that local securities firms have to notify investors of whether they were regulated by watchdogs due to illegal short-selling in a busine

Oct 6, 2022By Lee Min-hyung
Financial regulator considers disclosing foreign firms in case of illegal short selling
Economy

Insurance sector faces low growth amid inflation, uncertainties

gettyimagesbankBy Anna J. ParkInsurance experts in the country forecast a 2.1 percent year-on-year growth in premium income next year, due mainly to continuing inflation and recessional market sentiment stemming from increased uncertainties in macroeconomic factors.Participants at a seminar hosted by the Korea Insurance Research Institute (KIRI) in Seoul, Thursday, called for local insurers to strengthen risk management, as inflation wreaks havoc on the insurance industry by reducing the real value of insurance contracts and increasing the amount of coverage. “If the Korean economy goes through a recession, it will weaken the insurance sector's long-term growth,” the research institute's senior analyst Kim Se-joong said during the seminar. “It will harm the industry's growth rate and profitability, with the fall in insurance demand and the increase in termination of insurance plans. The increase of moral hazard would also negatively affect the sector's profitability with the rise of loss ratios. A possible delay in social agreements in the realm of pension reforms w

Oct 6, 2022By Anna J. Park
Insurance sector faces low growth amid inflation, uncertainties
Economy

Excess funds shrink in Q2 amid rate hikes

Bank of Korea Governor Rhee Chang-yong, center, presides over a Monetary Policy Committee meeting at the central bank in Seoul, Aug. 25. YonhapKorea's excess funds decreased in the second quarter from a year earlier amid fast-rising interest rates, the central bank's preliminary data showed Thursday.The country's total excess funds stood at 8.5 trillion won ($6 billion) in the April-June period, down from 14 trillion won a year ago, according to the data compiled by the Bank of Korea (BOK).Excess funds, the value of financial assets minus financial liabilities, measure the flow of funds of households, companies and the government, the three basic components of an economy. The fall in excess funds came after the central bank raised its policy rate seven times by a combined 2 percentage points since August last year, seeking to tame the rising inflation. Non-financial firms net borrowed 46.9 trillion won in the second quarter, compared with the 19.4 trillion-won net borrowing from a year ago. They increased their short-term lending in the face of higher market rates, the BOK said. Fin

Oct 6, 2022
Excess funds shrink in Q2 amid rate hikes
Economy

FSC chief vows 'preemptive' action against financial market volatility

Kim Joo-hyeon, right, head of the Financial Services Commission (FSC), speaks during a meeting with the heads of policy financing organizations, including the Export-Import Bank of Korea, at the government complex in Seoul, Aug. 2. YonhapKorea's financial regulator will keep a close eye on financial market situations and respond in a "preemptive" manner as volatility is rising amid global monetary tightening and worries over an economic slowdown, its chief said Thursday.Kim Joo-hyeon, chairman of the Financial Services Commission (FSC), also vowed continued efforts to engineer a "soft landing" in the country's ballooning household debt in a way that it would not cause strain to the overall economy."Financial market volatility has been expanding with global inflation woes persisting, major countries accelerating tightening and the Russia-Ukraine war dragging on," Kim told lawmakers during a parliamentary audit into the commission. "Going forward, we will respond in a preemptive manner while monitoring market situations."Korea's financial markets have been buffeted recently with stocks

Oct 6, 2022
FSC chief vows 'preemptive' action against financial market volatility
Economy

Foreign reserves shrink at fastest pace in 14 years in September amid strong dollar

A clerk sorts US$100 banknotes at the headquarters of Hana Bank in Seoul, Aug. 3. YonhapKorea's foreign reserves shrank at the fastest pace in about 14 years last month as authorities unloaded dollars to stall the local currency's excessive slide against the greenback, central bank data showed Thursday.The country's foreign reserves had stood at $416.77 billion as of end-September, down $19.66 billion from the previous month, according to the data provided by the Bank of Korea (BOK).This marked the fastest pace of an on-month decline since October 2008, when the reserves declined by the largest ever $27.42 billion in the midst of the financial crisis.Foreign reserves consist of securities and deposits denominated in overseas currencies, International Monetary Fund reserve positions, special drawing rights and gold bullion.September's decline came as Korea is struggling with the won's fast descent against the U.S. dollar amid worries that aggressive monetary tightening in major countries could throw the global economy into a recession.The won has depreciated around 16 percent against

Oct 6, 2022
Foreign reserves shrink at fastest pace in 14 years in September amid strong dollar
Economy

Cost of dining out hits 30-year high despite slowing inflation growth

Groceries are on display at a supermarket in Seoul, Wednesday. YonhapBy Yi Whan-wooThe cost of dining out rose to the highest level seen in more than 30 years, while the prices of some vegetable items jumped more than 90 percent despite a slowdown in overall consumer price growth in Korea in September for the second straight month, according to Statistics Korea, Wednesday.The September statistics come amid speculation that a hike in utility fees beginning this month could add to upward inflationary pressure, which is apparently unwelcomed by the government that forecast inflation to pass its peak and cool off in October.The government accordingly announced it will take measures to curb the prices of vegetables and other factors that increase inflationary pressure.Consumer prices in September grew 5.6 percent from a year earlier, after reaching a near 24-year high of 6.3 percent in July, only to fall to 5.7 percent in August.Statistics Korea attributed the back-to-back slowdown in inflation mainly to a fall in global oil prices.Prices of Dubai crude, Korea's benchmark, stood at $90.95

Oct 5, 2022By Yi Whan-woo
Cost of dining out hits 30-year high despite slowing inflation growth
Economy

Finance minister defends corporate tax rate cut plan, requests swift Assembly approval

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho speaks during a parliamentary audit of his ministry at the National Assembly on Yeouido, Seoul, Wednesday. YonhapBy Yi Whan-wooDeputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho defended the government's plan to reduce the maximum corporate tax rate to 22 percent from 25 percent during a parliamentary audit, Tuesday, arguing it is designed to benefit small and medium-sized enterprises (SMEs) more than larger businesses.Choo's remark came as the corporate tax cut plan has been disputed for favoring chaebols.It accordingly is anticipated to face a bumpy road in winning approval from the National Assembly, which is dominated by the main opposition Democratic Party of Korea (DPK). The right-leaning Yoon Suk-yeol administration seeks to win approval for its maximum corporate tax rate plan by December after introducing it in mid-2022.“The scope of tax deduction will be larger for SMEs, not conglomerates, under the government's plan to cut the income tax rate for businesses,” the finance

Oct 5, 2022By Yi Whan-woo
Finance minister defends corporate tax rate cut plan, requests swift Assembly approval
Economy

Inflation likely to remain high in 5-6% range for considerable time: BOK official

A customer shops for vegetables at a supermarket in Seoul, Oct. 5. NewsisKorea's inflation is expected to remain high in the 5-6 percent range for a considerable time, a ranking central bank official said Wednesday, citing upward rises in the energy and currency markets. Consumer prices, a key gauge of inflation, rose 5.6 percent last month from a year earlier, slowing from a 5.7 percent rise in August, according to the data from Statistics Korea. In July, consumer prices increased at the fastest pace in almost 24 years at 6.3 percent. Compared with a month earlier, September's consumer prices have gone up 0.3 percent, the data showed. "In September, consumer prices edged down from a month ago, but the core prices continued to rise, led by costs for individuals, such as eating out," said Bank of Korea (BOK) Deputy Gov. Lee Hwan-seok during the bank's inflation monitoring meeting in Seoul. He said upward pressure on prices is likely to remain high for the foreseeable future."Circumstances in the Russia-Ukraine war and the monetary policy tightening moves in major economies have raised

Oct 5, 2022
Inflation likely to remain high in 5-6% range for considerable time: BOK official
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