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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
  • 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
  • Economy

    Seoul stocks, won hammered by massive foreign selling

    2 MIN READBy Park Han-sol
    Seoul stocks, won hammered by massive foreign selling
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Economy

ANALYSIS Strong dollar, weak won: Is there any way out?

Concerns over Chinese economy, EU gas and U.S. Fed must ease for won to reverse courseStephen Lee is chief economist at Meritz Securities, Seoul / Courtesy of Meritz SecuritiesBy Stephen LeeThe Korean won has weakened severely against the U.S. dollar, sending its value to 1,362 won per dollar as of Sept. 2 ― the lowest since April 2009. Excluding global financial crisis periods, the currency value is the lowest since April 2001 when the global economy had just started recovering from the IT bubble recession.The won-dollar rate was once below 1,300 right after the U.S. Federal Reserve's Federal Open Market Committee (FOMC) meeting, on the hopes that the Fed might pivot to decelerating the pace of its rate hikes. The dollar index (DXY), measuring the dollar value against six major currencies, came down to 105 by the end of July from the previous peak of 108. Now the index has moved up even further beyond 109, which is the highest since 2001.The resurgence of the dollar index has stemmed from the weakening euro ― now below parity ― as well as concerns that the Fed will keep raising rate

Sep 4, 2022
[ANALYSIS] Strong dollar, weak won: Is there any way out?
Economy

Better preparation needed for aging foreign population in Seoul: experts

A 3D installation of Seoul's city brand I.Seoul.U stands in Yeouido Hangang Park. Courtesy of Seoul Metropolitan Government By Kim Bo-eunSeoul needs to prepare better to address the needs of the aging foreign population in the city, experts say. The suggestions come at a time when Korea is grappling with the extremely grave demographic challenges of its fast-aging population. The foreign population in the capital has been getting older over the years ― with those aged over 50 accounting for 36.2 percent as of 2020, up from 28.3 percent in 2019, according to data from the Korean Statistical Information Service. Foreign nationals in their 50s accounted for 20 percent, those in their 60s 13.1 percent and those in their 70s and above 3.1 percent.With the growing percentage of older foreign residents, local governments need to start preparing to address their needs, experts say. "Foreign residents face the same needs as their Korean counterparts: access to medical servic

Sep 3, 2022By Kim Bo-eun
Better preparation needed for aging foreign population in Seoul: experts
Economy

Korean won hits over 13-year low against US dollar

An electronic signboard in the dealing room of Hana Bank in Seoul, Sept. 2. YonhapSeoul stocks down for 2nd day on US rate hike woes Korean stocks fell Friday on concerns over the U.S. central bank's aggressive rate hikes and the tumbling Korean won. The Korean won slid further to a 13-year low against the U.S. dollar.After choppy trading, the Korea Composite Stock Price Index (KOSPI) shed 6.2 points, or 0.26 percent, to close at 2,409.41, extending the losing streak to a second session.Trading volume was a bit slim at 382.35 million shares worth 7.02 trillion won ($5.15 billion), with decliners outpacing gainers 528 to 322.Foreigners and institutions shed shares worth 779.57 billion won and 199.75 billion won, respectively, while retail investors picked up a net 288.46 billion won worth of shares.The index opened higher on dip-buying following a big drop in the previous session and had moved in a tight range before slipping into negative territory ahead of the release of key U.S. economic data.Investors await the U.S. payroll data for August due Friday (U.S. time), as the job r

Sep 2, 2022
Korean won hits over 13-year low against US dollar
Economy

Korea on alert over 6 more investor-state suits following Lone Star ruling

gettyimagesbank By Anna J. Park While government's high-profile battle with Lone Star Funds has finally reached an outcome after 10 years, Wednesday, six more similar investor-state dispute settlement (ISDS) cases filed against the government are still pending at the international arbitration tribunal. The total amount of claims asked by claimants against the Korean government exceeds 1.6 trillion won ($1.2 billion). According to ISDS Navigator operated by the United Nations Conference on Trade and Development (UNCTAD), there are a total of 10 ISDS cases filed against the Korean government, four of which have been concluded or discontinued, and the remaining six are ongoing. The case with the largest amount of claim is the one filed by U.S. activist fund Elliott Management against Korea in 2018, on the grounds that the Korean government allegedly interfered in the merger process of Samsung C&T and Cheil Industries. Elliott, a 7.12 percent stake holder in Samsung C&T

Sep 2, 2022By Anna J. Park
Korea on alert over 6 more investor-state suits following Lone Star ruling
Economy

Has inflation peaked in Korea?

Eo Woon-sun, a senior Statistics Korea official, gives a press briefing on consumer prices in August at the Government Complex Sejong, Friday. Yonhap Consumer price growth slowed down in August for 1st time this yearBy Yi Whan-wooThe rising consumer prices in Korea slowed for the first time this year in August, raising hopes that inflation may have reached its peak and is now heading south.Nevertheless, some officials and economists do not rule out the possibility of inflation accelerating again in the coming months, noting that the volatility in global oil prices, more hawkish U.S. credit tightening and other inflationary pressure risks remain high.According to Statistics Korea, Friday, consumer prices in Korea rose 5.7 percent in August from a year earlier ― the slowest pace since January ― after accelerating to a near 24-year high of 6.3 percent in July.“The idea of inflation peaking is plausible, assuming that prices of oil, crops and other related global variab

Sep 2, 2022By Yi Whan-woo
Has inflation peaked in Korea?
Economy

Consumer prices grow at slower pace in Aug. amid falling oil prices

Citizens shop at a discount store in Seoul, Sept. 1. NewsisKorea's consumer prices grew at a slower in August after running at a 24-year high the previous month as global oil prices slid, data showed Friday, in a sign that high inflation may have peaked.Consumer prices, a key gauge of inflation, jumped 5.7 percent last month from a year earlier, slowing from a 6.3 percent surge in July, according to the data from Statistics Korea. The on-year growth of consumer prices slowed for the first time in seven months. The inflation rate stayed in the 6 percent range for the second straight month in July.Consumer prices rose above 2 percent ― the central bank's inflation target over the medium term ― for the 17th straight month in August.The slower inflation came as global oil prices fell amid concerns that aggressive monetary tightening in major economies could slow the global economy and weaken demand for fuel.Prices of Dubai crude, South Korea's benchmark, stood at US$96.63 per barrel on average in August, down 6.3 percent from the previous month. The oil prices were still up 39 percent fr

Sep 2, 2022
Consumer prices grow at slower pace in Aug. amid falling oil prices
Economy

Government moves to overhaul inheritance tax system

gettyimagesbank By Yoon Ja-youngThe Yoon Suk-yeol administration took the first step to lower inheritance tax rates, following an announcement in July that it will overhaul the inheritance tax system. The Ministry of Economy and Finance announced recently it is taking bids for a research project looking into the introduction of an inherited property acquisition tax system. The ministry had announced in its tax revision plan in July that it will substitute the current inheritance tax system with the inherited property acquisition tax system to lower the burden on beneficiaries.Currently, an inheritance tax rate of between 10 percent and 50 percent is applied to the total value of assets bequeathed by the deceased. If the new tax system is introduced, the tax will be imposed on benefactors separately, thereby lowering their tax burden. There have been complaints, especially among business owner families, over the heavy inheritance tax. A majority of OECD member countr

Sep 2, 2022By Yoon Ja-young
Government moves to overhaul inheritance tax system
Economy

Lone Star ruling regarded as '50% defeat' for Korean gov't: experts

The lobby of Star Tower in Seoul's Gangnam District, where Lone Star's Seoul office had been located / Korea Times fileLegal, economic experts critical of justice ministry's self-praiseBy Anna J. ParkDebates continue over the ruling by the International Centre for Settlement of Investment Disputes (ICSID) that came after a decade-long legal battle between the Korean government and U.S.-based Lone Star Funds over the private equity firm's sale of Korea Exchange Bank (KEB). The Korean justice ministry described the ICSID's ruling ― ordering the Korean government to pay $216.5 million plus interest ― as an “overall victory” on the grounds that only 4.6 percent of the $4.68 billion that Lone Star had been claiming was acknowledged in the international arbitration court. The ministry also said it is worth pursuing the last available measure of seeking an annulment of the award to the ICSID, given that one minority view of the ruling fully accepted the Korean government's stance that it shouldn't have to pay Lone Star at all. However, some legal and economic experts criticized

Sep 1, 2022By Anna J. Park
Lone Star ruling regarded as '50% defeat' for Korean gov't: experts
  • Law firms are real winners in Korea-Lone Star battle
Economy

Law firms are real winners in Korea-Lone Star battle

gettyimagesbankBig law firms receive over 100 billion won in legal fees for Lone Star case By Anna J. Park As the Korean government has announced its plan to seek an annulment of the $216.5-million award that it was ordered to pay Lone Star Funds in a recent international arbitration case, law firms' revenues are expected to increase further. It has been estimated that both the Korean government and Lone Star spent over 100 billion won ($75 million) over the last decade on legal fees alone, and their billings will continue to accrue with additional legal action.“It's regrettable that we couldn't win on every argument point, but we did our best in representing the Korean government for the past 10 years. The firm will fully support the government's annulment registration move,” stated the official press release by Bae, Kim & Lee, the Seoul-based law firm representing the Korean government in its legal battle against Lone Star at the ICSID. Bae, Kim & Lee has cooperated with Arnold & Porter, a U.S.-based law firm, to represent the Korean government in the legal

Sep 1, 2022By Anna J. Park
Law firms are real winners in Korea-Lone Star battle
  • Lone Star ruling regarded as '50% defeat' for Korean gov't: experts
Economy

Korea suffers largest-ever trade deficit in August

Cars are ready for export at a pier belonging to Hyundai Motor in Ulsan, Monday.By Yi Whan-wooKorea recorded its biggest monthly trade deficit in August amid the prolonged slowdown in export growth, raising concerns that the country's economy will lose further growth momentum in the remainder of 2022. Exports have been the main driver for the Korean economy, and their slowdown is mainly attributable to the sluggish Chinese economy, which may mark its slowest growth in more than three decades in 2022. China is Korea's largest trading partner.Such export news suggests that the effects of the slowdown may ripple across broader measurements of the economy, such as the current account balance, and eventually affect the growth outlook that has been repeatedly revised down, according to experts.According to the data released by the Ministry of Trade, Industry and Energy, Thursday, the trade deficit amounted to $9.47 billion last month, the largest amount since the ministry began compiling data in 1956. It was also the first time since the 2008-2009 global financial crisis that the country's

Sep 1, 2022By Yi Whan-woo
Korea suffers largest-ever trade deficit in August
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